Des mots pour réveiller vos sens

Bienvenue sur le blog de Sensorium Corporation. Vous trouverez ici nos dernières actualités, études de cas commerciales et informations sur l'intelligence artificielle, la réalité virtuelle et la blockchain.


What are Central Bank Digital Currencies? CBDCs Explained
In recent years, the idea of a Central Bank Digital Currency (CBDC) has gained increasing attention from economists, financial regulators, and policymakers around the world. In 2020, only 35 countries were considering the idea of CBDC. However, at the dawn of 2023, that number had skyrocketed to 114 making about 95% of the global GDP. Apparently, the emergence of cryptocurrencies and blockchain technology has sparked interest in the potential benefits of a digital currency issued by a central bank. And governments are keen to not be left behind in the development of digital currencies. But what exactly is a CBDC, and why is it important? In this article, we will explore the concept of central bank digital currencies, how it differs from traditional currencies, and the potential benefits and risks associated with its implementation. ## What is a CBDC Currency? (Central Bank Digital Currency) A Central Bank Digital Currency is a digital form of currency or digital money issued by a central bank, which is a government institution responsible for managing a country's monetary policy. It is a digital representation of a country's fiat currency that can be used as a medium of exchange, a store of value, and a unit of account. Unlike traditional fiat currencies, which is physical money, a CBDC is a digital asset that can be transferred through electronic means, such as smartphones, computers, or other digital devices. It is designed to be a secure and efficient form of payment that can be used by anyone, anywhere, at any time. ## Types of Central Bank Digital Currencies Central bank digital currencies can be classified into two types, namely retail CBDC and wholesale CBDC. A retail CBDC is a digital currency that can be used by individuals and businesses to make payments and transactions, just like traditional money. They are intended to be used as a form of electronic payment for retail transactions, just like physical cash or digital payment methods such as credit cards or mobile payments. The exact features of retail CBDCs may vary depending on the specific design and implementation chosen by each central bank. Some possible features may include instant settlement, increased transaction privacy, and reduced costs compared to traditional payment methods. However, there are also potential risks and challenges associated with the development and adoption of retail CBDCs, such as the need to ensure security and prevent fraud, as well as potential impacts on monetary policy and financial stability. A wholesale central bank digital currency, on the other hand, is used for interbank transactions and settlement between financial institutions. Like the Project Icebreaker which is being built for testing interlinking and interoperability between several retail CBDCs. It was launched by the Bank of Israel, Central Bank of Norway, Sveriges Riksbank, and BIS Innovation Hub Nordic Centre in September 2022. The study, which was supposed to last until the end of 2022, examines a framework for allowing cross-border retail CBDC payments. A report is anticipated in 2023. ## Countries Currently Exploring Central Bank Digital Currencies? Several countries are currently exploring the concept of CBDC, including: - China: China has been at the forefront of CBDC development, with the launch of its digital yuan by its central bank in 2020. The digital yuan currently has a reach of 260 million and is expected to be rolled out more widely in 2023. - Sweden: Sweden is also in process of developing a CBDC, with the launch of its e-krona project. The project is currently in its testing phase, and the country's central bank is expected to make a decision on its implementation in the coming years. - The United States: The United States Federal Reserve launched its research and experimentation initiative in 2020. It started a project called Project Cedar shifting the country from research phase into development although it is unclear when a CBDC might be launched in the US. - The European Union: The European Central Bank is also exploring the concept of a CBDC, with the launch of its digital euro project. The project is currently in its exploratory phase, and a decision on its implementation is expected in the coming years. It is also worthy of note that by December 2022 all G7 countries had moved into the development phase of a CBDC while 18 of G20 countries are in an advanced stage of their development of their CBDC according to an Atlantic Council publication. ## How Does a Central Bank Digital Currency Work? The underlying technology behind a CBDC is a distributed ledger, which is a digital database that records all transactions in a secure and transparent manner. This technology is also used in cryptocurrencies such as Bitcoin and Ethereum. A CBDC is issued by a central bank and is backed by the full faith and credit of the government. It can be converted into fiat currency at a one-to-one ratio, which means that one unit of the CBDC is equal to one unit of the fiat currency. The central bank will be responsible for the issuance, management, and regulation of the CBDC. Furthermore, users will be required to create a digital wallet to store and use the CBDC, and transactions will be recorded on the distributed ledger. ## What are the Potential Benefits of a Central Bank Digital Currency? There are several potential benefits of a CBDC, including: ### Efficiency Traditional payment methods including cash, cheques, and bank transfers can be made faster and less expensively by using a CBDC. Also, it can increase transaction and settlement speed, which will make it easier for customers and clients to transact and make payments. ### Financial Inclusion In every country, there are people who don't have access to financial services because of low or no education or even distance. A CBDC can provide access to financial services to this set of people who are currently unbanked or underbanked. It can also help to reduce the cost and barriers to entry for financial services, making them more accessible to people with limited access to traditional banking services. ### Monetary Policy CBDCs can give central banks more effective tools to implement monetary policy. It will enable central banks to monitor and control the money supply, as well as track the velocity of money, which can help to stabilize the economy and prevent inflation. ### Security Another potential benefit of a CBDC is that it can provide a more secure form of payment compared to traditional payment methods. With CBDCs banks can reduce the risk of fraud, counterfeiting, and theft, making it a more reliable and secure form of payment. ### Financial Stability CBDCs can also help to increase financial stability by reducing the risk of bank runs and the reliance on commercial banks for liquidity. It can also improve the resilience of the financial system by providing a safer and more stable form of money. ## What are the potential risks of a Central Bank Digital Currency? There are also several potential risks associated with the implementation of a CBDC, including: 1. Privacy: A major risk would be that CBDCs would raise concerns around privacy and surveillance. Because all transactions would be recorded on a distributed ledger, there could be concerns around the tracking and monitoring of individuals' financial activities. While this may be a good deal for some people, the majority might not be too happy about their neighbors potentially finding out how they spend their money. 2. Cybersecurity: A CBDC would rely heavily on digital technology, which could be vulnerable to cyberattacks and hacking. If it were to be compromised, that could have significant implications for the financial system and the economy of the affected country. 3. Financial Disruption: The implementation of a CBDC could potentially disrupt the existing financial system, particularly if it results in a significant shift away from traditional payment methods. This could have significant implications for financial institutions and the wider economy. 4. Adoption: To be effective, a CBDC would require widespread adoption, which could be challenging in some countries. It may take time for individuals and businesses to become comfortable with using a digital currency, particularly if it is a new concept or if they have concerns around its security or privacy. 5. Centralization: A CBDC could potentially increase the centralization of the financial system, particularly if it is used to replace traditional payment methods. This could adversely impact competition and innovation within the financial sector. ## Difference Between CBDCs and Cryptocurrency CBDCs (Central Bank Digital Currencies) and cryptocurrencies are both digital currencies, but they differ in several ways. In the end, people's choice of which digital currency to use would depend on what they are trying to achieve. If they prize security, privacy or decentralization more, that would determine whether they favor cryptocurrency or CBDCs. Below are some differences between the two types of digital currencies: - Issuer: The main difference between CBDCs and cryptocurrencies is the issuer. CBDCs are issued and backed by central banks, whereas cryptocurrencies are not issued by any central authorities, financial institutions or governments. - Legal tender: CBDCs are likely to be legal tender, which means that they will be accepted as a means of payment and settlement of debts. Cryptocurrencies are not generally accepted as legal tender and their use as a means of payment is not yet widespread. - Control: Central banks have greater control over CBDCs, including the ability to monitor transactions, track the flow of money, and set monetary policy. Cryptocurrencies, on the other hand, are mostly decentralized and cannot be controlled by any single entity. - Privacy: CBDCs may be designed to provide greater privacy and anonymity for users, but central banks may also have the ability to monitor transactions and gather data about users. Cryptocurrencies generally provide greater privacy and anonymity, but they can also be used for illegal activities such as money laundering or financing terrorism. - Volatility: Cryptocurrencies are known for their volatility, with their value fluctuating wildly in a short period of time. CBDCs, on the other hand, are likely to be more stable, as they are backed by the central bank. ## Conclusion Although the creation of Central Bank Digital Currencies is still a vastly untested terrain, it is obvious that it is not going away soon. As long as cryptocurrency and other digital advancements continue to take center stage in the global economy, central bodies cannot afford to ignore this aspect of financial innovation. Besides, its numerous use cases and potential benefits cannot be ignored by truly astute entities. Hence it only stands to reason that each country would do its best to explore this technology and its benefits while working out ways to mitigate potential risks.
Mintable Tokens vs Minable Tokens: What's the Difference?
Mintable and mineable tokens are two types of digital assets that are used in the world of cryptocurrency. The major difference between both types of tokens is that producing minable tokens requires more time, effort, and resources compared to minted tokens. ## Difference Between Mintable Tokens and Minable Tokens
### Mintable Tokens Mintable tokens are digital assets that can be created on a smart contract platform, such as Ethereum, without the need for any consensus-related activities. These tokens are created through the use of a minting function within the smart contract, which generates a new supply of tokens. Mintable tokens can then be distributed and traded in the market. Token minting is the process of creating new tokens on a smart contract platform, such as Ethereum. These tokens, like ERC-20 and ERC-721, do not require the same resources or validation process as traditional mineable tokens like Bitcoin and Ethereum. Mintable tokens can have caps on their total supply, and the supply can be adjusted through the minting or burning of new tokens. It is a technique that is often used with algorithmic and crypto-backed stablecoins to manage their supply and value. ### Mineable tokens Mineable tokens are digital assets that are generated through the mining process on a proof-of-work or proof-of-stake blockchain. On proof -of work-models, Miners have to solve challenging equations while Validators verify the validity of blocks by staking their own tokens. Miners or validators play a crucial role in securing the network and producing blocks, and as a reward for their efforts, they are issued new tokens that have been minted by the protocol. The issuance of mineable tokens follows certain consensus rules, and the supply of these tokens can be capped (hard cap or soft cap) or subject to a decrease over time through processes like halving. For instance, the Bitcoin network has a fixed supply of tokens and a block reward of 6.25 BTC per block, while the Litecoin has a block reward of roughly 12.5 LTC per block. ## What is a Minting Function A minting function is a feature in some cryptocurrencies that allows users to create new tokens and add them to the blockchain. The process of creating new tokens is often referred to as "minting." ### Continuous Token Supply In most cases, minting requires the user to have a certain amount of tokens already in their possession, as well as meet certain other conditions specified in smart contracts. For example, they may need to prove that they have completed a specific task or contributed to the network in some way. The minting function is typically implemented as a smart contract, which is a self-executing contract with the terms of the agreement between buyer and seller being directly written into lines of code. The smart contract can automatically enforce the conditions of the minting process, ensuring that new tokens are only created in accordance with the specified rules. Some examples of cryptocurrencies that have a minting function include Ethereum and Binance Coin. Minting can be used for a variety of purposes, such as incentivizing users to contribute to the network, or as a way to fund the development of a project. ## Mintable Tokens Supply Types:
### Fixed Token Supply A mintable token with a fixed supply is one in which the total number of tokens that will ever be produced is set and cannot be increased. This means that once all the tokens have been mined or created, no more will be added to the supply. This type of token is often used as a way to increase the value of the tokens over time, as the fixed supply model can lead to demand exceeding the limited supply available. The fixed supply model can also be seen as a way to combat inflation, as there is no possibility of new tokens being created and diluting the value of existing ones. Examples of cryptocurrencies with a fixed supply include Bitcoin and Litecoin. In the case of Bitcoin, the total supply is capped at 21 million proof of work tokens, while Litecoin has a maximum supply of 84 million tokens. ### Continuous Token Supply This is a type of mintable token where new tokens can be created and added to the supply on an ongoing basis. This means the total number of tokens in circulation is not fixed and has a continuous supply. A Continuous supply model is often used to fund project development or incentivize network contribution. However, they can also be prone to inflation, as the creation of new tokens can dilute the value of existing ones. Examples of cryptocurrencies with a continuous supply model include Ethereum and Binance Coin. In the case of Ethereum, new tokens are created through the minting function, which is implemented as a smart contract. In the case of Binance Coin, new tokens are created through a process called "coin burning," in which a portion of the supply is permanently removed from circulation. ## Examples of Mintable Tokens
### Stablecoins Stablecoins are a type of mintable token that is designed to maintain a stable value relative to a specific asset or currency. They are often pegged to the value of a stable asset, such as the US dollar, and are designed to maintain a 1:1 value ratio with the underlying asset. Stablecoins are often used as a way to provide a stable store of value within the volatile cryptocurrency market. They can also be used for cross-border payments, as they allow users to transfer value without being subject to the fluctuations of traditional cryptocurrencies. Examples of stablecoins include Tether, USDC, and Paxos Standard. These stablecoins are backed by real-world assets, such as cash like the US dollar, or gold, and are intended to provide a more stable alternative to traditional cryptocurrencies. ### NFTs NFTs (Non-Fungible Tokens) are a type of mintable token that represents a unique digital asset. They are often used to represent things like art, music, videos, or other types of media. NFTs are stored on a blockchain and are unique because they cannot be replaced or exchanged for another asset of equal value. One of the key features of NFTs is that they can be bought, sold, and traded just like any other asset. They have gained popularity in recent years as a way for artists and creators to monetize their digital content and for collectors to own and trade unique digital assets. NFTs are minted using smart contracts, which define the terms and conditions of the asset and ensure that it is properly registered and tracked on the blockchain. Some popular examples of NFTs include Cryptokitties and BAYCs. ## The Bottom Line In summary, minable tokens are those that are generated through a process called "mining," which involves using computer power to solve complex mathematical problems and add transactions to a blockchain's public ledger. On the other hand, mintable tokens are created and issued by a central authority through smart contracts, such as a company or organization, and do not require mining to enter circulation. There lies the difference between mintable and mineable tokens. Both minable and mintable tokens have their own unique characteristics and uses, and the decision to use one over the other will depend on the underlying business model, specific needs and goals of a project.
What is Etherscan and How To Use It?
Most cryptocurrencies such as Ethereum have an open, transparent database. Anyone can see the digital ledger of transactions as everything that happens on-chan is published. That said, querying data from blockchain technology is an uphill battle. Therefore, you can use block explorer to simplify your search instead of looking at the raw data that is nearly impossible to decipher. Etherscan is one such effective block explorer that abstracts the complexity of retrieving data on the blockchain by providing a simple interface for Ethereum blockchain. Before having a closer look at Etherscan, let’s understand block explorers first. ## Block Explorers Although the blockchain contains all information about your transactions, it is very time-consuming to go through the entire blockchain to know what’s going on there. Thanks to block explorers, you can browse and search this open database to know the transaction details and the amount of crypto owned by a specific wallet. Moreover, some block explorers display the sender and receiver address as well as the amount of “Gas” paid for a particular transaction. Let’s learn about Etherscan; how it works, how it simplifies the blockchain data, and how to use it in a blockchain strategy. ## What is Etherscan? Etherscan serves as a blockchain explorer that allows users to look through the transactions, smart contracts, wallet addresses, blocks, and other on-chain data related to Ethereum-based trades and assets. You can access many features without opening your account or connecting to your wallet. Like other cryptocurrencies, all Ethereum interactions are publicly recorded on Blockchain. Etherscan is a block explorer software to visualize past transactions on the Ethereum network that spans from transferring coins to purchasing non-fungible tokens (NFTs). ## Why Do You need Etherscan? Etherscan allows users to search and explore the Ethereum blockchain for transactions, tokens, addresses, and other activities. Ether, an Ethereum token, is the world’s second-largest cryptocurrency for market capitalization. Etherscan provides Token Tracker for this widely used token by providing information, such as price, holders, total supply, and transfers. There are numerous use cases of Etherscan that make it a powerful block explorer. It allows you to monitor high-profile NFT holders’ portfolios. Moreover, you can track what a certain NFT project or company is doing with its funds. For instance, Gamestop dumped $42 million worth of NFX tokens, shortly after it received a $100 million grant from Immutable X. The proof of this incident was provided by Etherscan. By tracking the transaction of NFT projects' potential rug pulls and NFT scams, Etherscan helps the victims of crypto scams. Along the same line, Etherscan tracks the “whales” wallet which holds a large amount of ETH. Monitoring their movement is quite helpful as you can predict the price movement with this information. Anyone can use Etherscan to search for and validate Ethereum transactions. The use cases may involve: - Searching and viewing wallets and transactions - Tracking gas fees - Interacting with smart contracts - Revoking or reviewing your token approvals - Using Token ignore list feature to hide your tokens - Staying up-to-date with the Ethereum ecosystem Note that Etherscan is not a wallet; you can use Etherscan to search your Ethereum wallet and track the transactions but if you want to enter into a transaction or use ETH, you have to access your crypto exchange or wallet.
The Ethereum Shanghai Upgrade Explained
The successful completion of the Ethereum Merge brings forth the Shanghai Upgrade, also known as EIP 4895. The upgrade will introduce reduced transaction fees, and the transition to a proof of stake model, and it will also enable withdrawals for staked ETH. The upgrade acts predominantly as a precursor to the improvements to scalability that the Ethereum Foundation has proposed in the upcoming year. ## What is Ethereum Shanghai Upgrade? The Shanghai Upgrade transition is the network's next upgrade of the Ethereum mainnet. It primarily aims to transition to proof of stake, consequently allowing validators to finally withdraw their staked ETH both partially and fully. This is a major improvement and will further incentivize the crypto community to shift towards ETH accelerating network participation. As of yet, the pre Shanghai testnet allows for both complete and partial validations to be withdrawn. The upgrade also introduces Layer 2 fee reductions with the implementation of proto-danksharding aiding in the network's overall scalability and sustainability while also reducing gas fees. Moreover, the upgrade will also introduce EOF, separating code and data, which is significantly helpful for code validation. The release date of the Shanghai Upgrade is expected to be around March and April. However, there's no confirmation and developers agreed that this date may be pushed forward to as late as September 2023, especially with EIP-4844 (proto-danksharding) already being delayed to a March 2023 update. ## Ethereum Improvement Proposals to Look Forward To The Shanghai Upgrade consists of a number of EIPs (Ethereum Improvement Proposals). While most of them can be considered as minor upgradations, there are three EIPs that are the most interesting out of the bunch: ### EVM Object Format The Ethereum Virtual Machine object format, commonly referred to as EVM object format or EOF, will essentially upgrade the network to separate code from data. Highlighted in EIP-3540, this is extremely advantageous for on-chain code validation. This distinction can also lead to ease of use and a significant reduction in gas fees. While off-chain tools already deal with existing code, static analysis tools can also benefit from the separation. However, the advantages to the latter are relatively minor. Moreover, EIP-3670 is also expected to be included in the Shanghai Upgrade, extending the deploy time validation of the separated code section. This allows for unassigned instructions and truncated PUSH requests to be rejected. ## Beacon Chain Withdrawals Stakers who locked their Ether in the network's Beacon chain smart contract were eligible for rewards. Now, EIP 4895 will finally enable beacon chain push withdrawals as operations for all staked ETH. Moreover, the update will also allow Beacon Chain holders to finally withdraw their rewards, adding an operation that will push all validator withdrawals from the Beacon Chain to the wider Ethereum Virtual Machine (EVM). ## Layer 2 Fee Reductions With rising competition from Solana, it was only a matter of time before the Ethereum Foundation took major steps to combat ever-increasing block sizes. With Layer 2 fee reductions, a maximum limit to CALLDATA in a block is introduced with further proto-danksharding implementations in EIP-4844 which should drastically reduce gas fees on the Ethereum network. ## Will Ethereum Fees Decrease After The Upgrade? Yes, Ethereum fees will decrease after the Shanghai upgrade. This is because the upgrade will equalize block size and also increase overall call-data efficiency in the Ethereum network. Galen Moore, content lead at Axelar had this to say about the reduced gas fees after the Shanghai upgrade: “When specialized chains can build on a layer-2 like Polygon and reduce the cost of communicating with the base chain Ethereum, that reduces gas prices for users everywhere in the ecosystem — by making it more efficient to scale horizontally in a way that spreads demand.” - Galen Moore The lower transaction fees is great for the overall longevity of the network. the Ethereum Shanghai update is also expected to introduce a WARM coinbase which will slightly lower fees paid by prominent builders like Flashbots and BloXroute. ## Conclusion While there's no concrete release date for the upgrade in sight, it's quite clear that the crypto community has provided an overall positive response to the public test net. With staking rewards now soon being able to be withdrawn, its clear that Ethereum will be undergoing a paradigm shift in the upcoming years with the Merge and the Shanghai Update turning into the first two EIPs that will dictate the future of Ethereum and Ether. ## FAQ (Frequently Asked Questions)
### What is the Ethereum Shanghai upgrade? The Ethereum Shanghai upgrade is Ethereum's second major upgrade after the Merge which offers critical infrastructure and elemental updates to the blockchain's EVM. This will include reduced gas prices, staked ETH for early client testing of the PoS beacon chain to finally be allowed, and updates to smart contract facilities as well. ### What changes are in the Ethereum Shanghai upgrade? Amongst many other minor changes in the network, Ethereum developers have focused on three key aspects, the EVM object format, allowing staked beacon chain withdrawals and te ability to process more data concurrently on the network lowering gas prices substantially. ### Will Ethereum price increase with the Ethereum Shanghai Upgrade? Yes, akin to most other crypto network updates, the major upgrade should lead to an overall price increase of Ethereum. However, the extent of this increase is yet to be determined. This is because events such as the Merge, which typically lead to an increase have instead led to a gradual drop instead with a price reclaim not in sight as of yet. ### What is the release date of the Ethereum Shanghai Upgrade? According to core developers of Ethereum, the Shanghai Upgrade is expected to roll out in mid-2023, somewhere around March and April. As of yet, there's no finite date for the upgrade with the latest date being September 2023 for the complete rollout.
What Is a Smart Contract Security Audit?
While blockchain technology is secure, vulnerabilities may be found in the blockchain application. For instance, the smart contracts that are built inside these applications may have errors in them. The code is the law in smart contracts. Hence, there is no room for even minor errors. Once the code is deployed, developers can’t fix it back. Therefore, it is imperative to have a system that timely identifies the vulnerabilities and critical bugs that may be present in the underlying smart contracts. A smart contract audit is a process where blockchain security engineers pay attention to the code line of a crypto or blockchain project to identify security issues and inefficient coding. ## What are smart contracts? Smart contracts are digital contracts that use blockchain technology to enforce the terms of an agreement. The execution of an agreement is automated in smart contracts, and the participants are certain of the outcomes. The program ensures that the predetermined conditions are met and verified during cryptocurrency transactions. Businesses from various sectors benefit from smart contracts' applications, including supply chain, healthcare, and international trade. ## History of smart contracts Smart contract technology was introduced in 2014 as a part of the Ethereum specifications. So when it comes to smart contracts in financial transactions, Ethereum is the key to the game. The smart contracts reside at a specific address on a blockchain and are composed of code (functions) and data (state). This is one of the reasons why so many dApps are meant to run on Ethereum and Ethereum-compatible blockchains. ## Working of smart contracts Smart contracts quickly resolve disputes among the vendors, thus helping them build strong relationships. Besides being able to self-execute and reduce time and resource costs, smart contracts have the advantage of being integrated into the Blockchain. Smart contracts started out as simple IF/THEN statements. The developer who coined the term “smart contract” wanted to describe a smart contract as the blockchain version of a vending machine: IF the right coins are deposited, THEN it dispenses a snack. In a sense, the vending machine is intelligent, i.e., it can perform its task automatically and independently. On Ethereum, a smart contract could specify that IF an amount is received in the user's wallet, THEN 10% is transferred to a second wallet set aside for long-term savings. Like other information on the blockchain, smart contracts are immutable, i.e., cannot be altered after being distributed, and irreversible, i.e., cannot be deleted. Most developers make the source code of their smart contracts available for inspection so users can be sure that the entire contracts don't divert some or all of their funds to the developer's wallet. ## Use of smart contracts in cryptocurrencies While smart contracts can be used for various purposes, they have found wide popularity and application in the context of blockchain-based cryptocurrencies. Bitcoin and Ethereum, for example, are two cryptocurrencies that use smart contracts to enforce the terms of their transactions. When someone sends Bitcoin to another person, a smart contract is used to verify that the transaction is valid and executes it accordingly. This allows the developers to offer a number of benefits, including safety, efficiency, and cost reduction. When talking about smart contracts, actual contracts are not referred to, as one might mistakenly think. These are IF/THEN functions that are found within computer or software protocols, which, when certain conditions occur, give a very precise answer. ## The technology behind smart contracts These "contracts" are called smart, i.e., intelligent, because they are based on blockchain technology. In practice, they work exactly like a standard contract. For example, if a rule set forth in the contract is broken, the system automatically applies a penalty. These contracts are smart because, in theory, they allow people to carry out many activities without resorting to intermediaries such as lawyers or notaries. To have a true smart contract, the execution of consequences under certain conditions should be automatic. The software takes care of everything in smart contracts without human intervention. Since smart contracts work within the blockchain, most of the ones used today are related to cryptocurrencies and the financial market. However, these could probably be extended to other areas with the refinement of the discipline. ## Why should one choose a smart contract over a standard contract? The smart contract provides a high degree of safety in the blockchain. In addition to eliminating intermediaries, the internal encryption system further adds security. This makes the contracts indecipherable to those not involved in the deed. A second benefit concerns the economic side. Paying a notary or a lawyer is more expensive than creating a contract independently through one of the platforms that allow it, such as Ethereum. To draw up a normal contract, you must entrust yourself to a lawyer or a notary, while you can manage a smart contract with total autonomy. When the contract is loaded, the software automatically generates the response. To write a smart contract, you need to know the programming language and the basics of smart contract deployment. This allows all information to be recorded and made immutable, secure, and accessible. Some of the benefits of smart contracts and blockchain include transparency, traceability, integrity, elimination of bureaucracy, and elimination of authority figures. ## What is a smart contract audit? The smart contract auditing process involves a methodical examination and detailed analysis of the smart contract code to identify any incorrect coding or any security issues that may be present. This ensures the reliability of the blockchain applications and provides ways to resolve problems. Usually, smart contract security audits involve running tests through analysis tools and manual code analysis. With the boom in DeFi, more and more financial applications are now being built with blockchain technology. The investors and users of these applications expect them to be non-custodial, open, transparent, composable, and above all, secure. A smart contract audit is a way to ensure that all the contracts are fully performance-optimized and there are no vulnerabilities or security issues. ## Why do we need smart contract auditing? Since blockchain applications have to manage large sums of money, security is one of the most pressing problems for deploying smart contracts. Considering the damages that might occur due to errors in blockchain applications, a security audit must be considered an integral part of smart contract development. For example, a theft of around $60 million in Ether (ETH) occurred during The DAO breach on the Ethereum blockchain. Also, smart contracts are irreversible in nature. If a vulnerability is identified after deploying smart contracts, you could risk losing the entire project and the related assets. Through smart contract security audits, you can get your application checked by veteran security auditors who will double-check your code to find the bugs and errors. ## Possible security vulnerabilities in smart contracts Considering that smart contracts are made up of code, there’s always a chance of error or negligence while designing the security architecture. Here are a few possible security vulnerabilities that may be found in smart contracts: ### Function visibility errors Solidity is a high-level programming language for implementing smart contracts. The default visibility property in this language is set to public. If the developer forgets to define a private function’s visibility, there is a big chance that anyone can destroy the contract by calling the Destruct function. ### Timestamp dependency The contract’s logic is dependent on the current time. This means that the miner can manipulate the execution results by simply changing the current time in the device. ### Random number vulnerability The attackers can use random number generation (RNG) to accurately guess the random number generated by a smart contract that employs a publicly known variable as a seed. ## Failure to differentiate humans and contracts The smart contract may fail to identify whether the smart contract caller is a person or a contract. For instance, hackers can exploit the FoMo3D game by accurately predicting a contract's timestamp (using the airdrop function). ### Spelling mistakes Constructors are commonly used to initialize the contracts and determine their owners. In Solidity, the function to set the state variables is invoked when the contract is constructed. At times during programming, the compiler would not notice the misspelling of the function hence resulting in anyone from the public being able to call the function in public constructors. ### Reentrancy attacks A reentrancy attack occurs when a function makes an external call to another untrusted contract. This can occur due to the developer’s uncaring attitude and negligence. As a result of this attack, the untrustworthy agreement can make a recursive call back to the original function in an attempt to drain the funds. ### Gas Griefing Attack If your Ethereum smart contract cannot check the required gas to execute a sub-call, you can be vulnerable to the gas-griefing attack. ## Types of smart contract audits The types of smart contract audits may vary depending on the nature of the projects. Below, we will discuss both manual and automated smart contract auditing techniques. This can cause the attacker to bypass the payments and fool the smart contract. ### Automated smart contract auditing Automated smart contract auditing ensures a much faster response time by removing human auditors from the process. The program used in this audit is designed to identify the parameters that run the program, thus making it easier to spot common coding errors. This type of audit is as effective as the automated analysis tool used. ### Manual smart contract auditing While the automatic flaw detection software effectively identifies the common errors in the code, it disregards the underlying motives of the developers for having the audit conducted. Manual inspection is a crucial prerequisite for enhanced discovery of security flaws in the smart contract code. This audit is carried out as a unique project under the supervision of qualified smart contract auditors. In such an audit, the engineers inspect the code, carefully assess the application's specifications and ensure that the project performs as per the anticipated functions. ## Key benefits of auditing your project’s smart contract Auditing your project’s smart contract is of utmost importance to improve its security, usability, and trustworthiness. ### Fixing potentially costly security vulnerabilities Coding flaws, if not identified timely, can result in significant losses. For instance, hackers managed to steal 120,000 wETH or $326 million from an escrow system called Wormhole due to a vulnerability in the signature verification protocol. Therefore, conducting a smart contract audit is more of an investment than a cost. ### Receiving actionable suggestions from industry leaders and experts Once the audit is completed, the audit providers carefully critique the code. Based on the identified concerns, the audit team provides the project team with suggestions and recommendations to make the necessary modifications. ### Giving your community extra peace of mind Having your project audited by industry experts and tweaked for enhanced security gives your community extra peace of mind. There is increased trustworthiness, and they use the applications more confidently. ## What are the steps of a smart contract audit? Most of the smart contracts are built using the Solidity programming language. Before the smart contract audit starts, the code errors and difficulty of exploitation are classified according to their severity. While many smart contract audits follow a standard procedure, there might be differences based on the project's nature and the auditor's style. Following are the steps that are involved in the security audit process: ### Defining the audit’s scope In this step, access to the Ethereum smart contracts is given to the audit team to conduct a preliminary examination and define an audit scope. The auditor collects the necessary data to audit your blockchain application and starts working on an executive summary. This mainly includes going through the smart contract security specifications, including the project’s architecture, development methodology, and design decisions. The code specifications are gathered, and the architecture is examined. Also, the auditors try to determine the audit's scope and understand the project's goals. ### Conducting unit testing The auditors use specialized tools to test each smart contract function. The entire contract’s code may be included in the unit tests. Unit testing concentrates on specific functions and examines the whole code using integration tests. ### Running a manual audit In this stage, the auditors don’t rely on using the software. Instead, they use their professional experience and expertise to identify potential smart contract vulnerabilities. It might involve simulated cyberattacks like penetration testing. This helps the auditors in detecting front-running attacks efficiently. ### Running an automated audit Automated auditing is the analytical phase of the audit and involves using bug-detection software. This stage includes the smart contract’s overall code. Considering that the code cannot be changed once it’s deployed, the auditors look out for the “code freeze” now. There is no room for any inconsistencies and flaws at his particular time, and no modifications will be made after the final draft stage. Automated auditing is much faster as compared to manual audits. ### First audit report with suggestions After the auditors are done with auditing smart contracts, they document the discovered code flaws and provide feedback to the project team so that they can resolve the errors. Some smart contract audit companies may help fix each vulnerability found. ### Final audit report with post-fixing evaluation In the final report, the auditor will provide detailed findings and recommendations based on their analysis. This audit report is a valuable resource for anyone involved in developing the blockchain application. It lists potential security concerns and a roadmap for fixing weak smart contracts. ## How long does it take to audit a smart contract? The time it takes for a successful security audit depends on the project's complexity, unit test cases, and size. It also depends on the type of audit process that is being conducted. While an automatic audit can take up to one day for ERC20 and BEP20 contracts, the manual audit may take much longer. The audit process can take anywhere from two to 14 days for a normal-sized project. However, it could take up to a month for complex projects. ### How much does a smart contract audit cost? The smart contract audit cost depends on the application's complexity and size. Depending on the nature of the project, the cost of each step of the smart contract audit varies. These steps include a collection of code design, unit testing, auditing approach, initial draft, final audit report, and audit assessment. The smart contract audit companies decide this cost. Usually, the total cost is between $5000 to $15,000. In exceptional cases, the cost may be even higher. Once the audit is complete, the auditing firm will provide you with an audit report detailing the faults in the code and proposals to improve the application's overall security. ## Conclusion A smart contract audit for your blockchain project can help you avoid costly errors and receive a detailed vulnerability report and mitigation guidance from security engineers. This can help you in improving the functionality of your smart contracts and application. It should be a necessary part of the project before the launch of the blockchain applications.
What is DeFi 2.0?
DeFi, or Decentralized Finance, is a powerful blockchain-powered innovation that disintermediates traditional financial services. DeFi protocols are constantly evolving, and the existing models of agreements in the financial services domain are undergoing continuous improvements. This has led to the creation of DeFi 2.0, which is an umbrella term for the new generation of decentralized finance platforms and functions. DeFi 2.0 protocols are made keeping in view the existing flaws and limitations in DeFi models, which are mostly associated with liquidity, scalability, and security. The DeFi ecosystem was created by the pioneers of DeFi protocols such as Compound, Uniswap, and MakerDAO. These platforms introduced decentralized stablecoin and laid the foundation for the thriving DeFi ecosystem. The DeFi 2.0 ecosystem promotes an open-source development culture and transparency by eliminating the need for a central administrator.
## What is DeFi 2.0? One of the distinguishing financial elements of Web 3.0 is the concept of Decentralized Finance (DeFi). By DeFi solutions, we mean the programs and functions that work in a financial system that is no longer based on the centrality of its traditional intermediaries, such as banks, etc. Rather, it is organized and built on new technologies capable of disintermediating the exchange of information and finances between multiple subjects. Underlying DeFi is blockchain technology, on which new paradigms are being studied and developed with the aim of revolutionizing traditional finance and the global economy. ### DeFi 2.0 protocols DeFi 2.0 protocols are built based on the concepts like yield farming and lending which are the prior DeFi breakthroughs. The DeFi pioneers were able to access dependable exchanges through these DeFi protocols. DeFi 2.0 provides better protection from financial losses and unlocks greater value from stakes funds. Also, DeFi 2.0 offers greater scalability by leveraging a variety of blockchains. ### DeFi 2.0 Products A product's ability to be available free of charge without any intervention from governments, internet infrastructure providers, or even the program developers is an excellent litmus test for determining whether a product is decentralized or not. Another critical component in DeFi 2.0 products is the automated self-executing programs called smart contracts. Their main purpose is the fast and transparent execution of financial agreements on the blockchain. Using smart contracts managed on a distributed ledger makes it possible for the software to continue to be accessible to anyone. All users need are resources and knowledge to engage in a smart contract. ## Application of Blockchain Technology in the Financial Services Industry Blockchain, the technology behind the digital currency Bitcoin, has been a source of inspiration for most DeFi solutions and projects. Public blockchains allow anyone to access the history of transactions, which means that it is not controlled by one centralized source. This is important because centralized systems and human gatekeepers can limit the speed and complexity of transactions while also providing users with less direct control over their money. By extending the use of blockchain beyond simple money transfers and to more complex uses in the financial sector, DeFi projects are revolutionizing how the client’s data is managed and how the transactions are handled. For instance, the blockchain technology used in DeFi can be used to put the client’s information on the blockchain so that various financial companies can access it for their know-your-customer (KYC) processes. This will save resources for both the client and the financial institutions since they would not have to go through the KYC process for every new financial account. ## DeFi 1.0 vs DeFi 2.0: What’s the difference? In DeFi 1.0, the structure of the model is quite complex, which makes it difficult for new members to use the products of decentralized nature. Hostile user interface and scalability challenges impacted how early DeFi protocols worked as the Ethereum blockchain powered most solutions. DeFi 2.0 has resolved this problem by enhancing the user experience (UX), thus allowing everyone with a computer or smartphone to navigate the applications easily. Furthermore, DeFi 2.0 protects users from the risk of temporary losses, such as impermanent losses caused because of the volatility of a trading pair. Eventually, the second generation of DeFi also mitigates the risks associated with lending processes and eliminates the interest payable on loans. The huge gas fees and long hours of waiting to transact in the DeFi 1.0 space further add to the already-mentioned problems. DeFi 2.0 has reduced the costs involved in executing transactions by lowering gas fees and improving the transaction processing speed. Furthermore, DeFi 2.0 promises a reliable supply of liquidity through the introduction of liquidity pools (LPs) which provide incentives to the liquidity providers. DeFi 2.0 aims to give more decision-making authority and ecological governance to the community members as compared to DeFi 1.0. ## The problems of DeFi 1.0 Difficulty in attracting liquidity, high volatility, and lack of regulation are some of the problems associated with DeFi 1.0. Furthermore, the more massive a platform becomes, the most vulnerable it gets to security challenges. ### Liquidity DeFi 1.0 relies heavily on liquidity mining funded by the users. In DeFi 1.0, there is always a risk of impermanent loss for the investors due to the general uncertainty and volatility of the token price. Furthermore, capital allocation is inefficient, resulting in long-term consequences in yield farming. Therefore, it becomes extremely difficult to retain long-term investors in the project, thus increasing the chance for financial risks. There needs to be a long-term reward mechanism to attract liquidity in a sustained matter, like providing the investors with liquidity provider tokens. In this way, people will actually take an interest in the project and not focus on the collection of tokens only. This is also not a long-term solution considering that people remove their capital as soon as they find a better project. Security A hacker getting unauthorized access to the DeFi applications can result in a major loss of funds. Unlike traditional finance, DeFi 1.0 lacks any consumer safeguards. DeFi can be heavily used in money laundering and fraud because it is unregulated. Since most users don’t understand these risks, sending security updates on smart contracts is the only option left to safeguard people from cyber criminals. ### Scalability Another problem with DeFi 1.0 is scalability. This issue is found on its most extensive Layer 1 network, Ethereum. High gas fees and long waiting times due to the excessive traffic contribute further to this problem because it strains the user experience. ### Oracles One of the problems with DeFi 1.0 is the delay in transactions and network congestion due to the massive traffic of the DeFi protocol on the Blockchain. This is where the oracles have to play their part. Oracles are middleware entities that link smart contracts to resources outside of their native blockchains. Apart from prioritizing the transactions and catering to the needs of smart contract developers, oracles can also function as autonomous auditors. Without secure oracle networks, DeFi 1.0 protocols are unable to use any off-chain data. The DeFi 1.0 “oracle problem” refers to the conflict between authenticity, security, and trustworthiness in third-party oracles. ### Centralization Many DeFi 1.0 projects don’t follow the principles set by the Decentralized Autonomous Organizations (DAOs). These principles follow the bottom-up management approach of decision-making to ensure decentralization. To ensure higher scalability and security, the DeFi 1.0 project must compromise with decentralization. This creates a dilemma and leads to a loss of faith among the DeFi users considering that the decentralization aspect is not prioritized. ## Innovation in DeFi 2.0 Decentralized finance has been providing services for the cryptocurrency ecosystem for many years. However, its boom began in 2021, thanks to various lending platforms and decentralized exchanges that managed to unify this system to make it grow despite the problems. Therefore, despite having used a system with an imminent need for improvements, everything indicates that its growth will continue to be exponential for the second generation. ### Yield farming Yield farming is a practice of bootstrapping liquidity for new DeFi protocols. It allows yield farm LP tokens to be used as collateral for loans. This eliminates the usual slippage in pricing and is a good way to attract liquidity.
In these second-generation projects, popularity can be generated from the improvements implemented within DeFi, such as the liquidity mining system. By gaining investors' confidence, they can request loans with lower collateral and may be audited to ensure the safety of the funds. And for those concerned about volatility, it will mostly be arranged to add long-term liquidity through the use of a stablecoin. A long-term issue with yield farming is that it is very difficult to retain users. As soon as they find a better option, they will move their entire capital to other protocols. ### Decentralized autonomous organizations Decentralized Autonomous Organizations (DAOs) play a great role in improving the DeFi models. They present a fresh perspective on the legitimacy of governance. It enforces the decentralized aspect of DeFi 2.0 by allowing anybody to vote on the project's evolution. ### Layer 1 & Layer 2 blockchains A growing number of DeFi protocols are available on the Layer 1 and Layer 2 blockchains. Innovations are being made in Layer 1 & Layer 2 blockchains by making advancements in cross-chain bridging and blockchain scaling. The protocols are easily deployed on Ethereum Layer-2 solutions like Arbitrum, Optimism, and Starknet and Layer-1 networks like Avalanche, Solana, and Gnosis Chain, etc. Layer 2 blockchains offer increased privacy as opposed to Layer 1. ## The goal of DeFi 2.0 The goal of DeFi 2.0 is to turn people away from the traditional financial system by democratizing finance and making DeFi products as user-friendly as possible. DeFi 2.0 removes the intermediaries and third parties from the financial services. Another goal of DeFi 2.0 is to remove any shortcomings that were present in DeFi 1.0. These shortcomings include elements of centralization, confusing interfaces, unattractive liquidity, and capital inefficiency. DeFi 2.0 provides enhanced user experience, greater scalability, better protection, improved capital efficiency, and excellent value from staked funds. ## Investing in DeFi 2.0 Investment opportunities offered by DeFi 2.0 come with a much broader scope. DeFi 2.0 simplifies the processes on the front end and adds a layer of complexity to the use cases for DeFi. Before choosing a DeFi project, it is imperative to ensure that it complies with your financial expectations and goals. While investing in DeFi can generate handsome profits, it is also risky and requires utmost vigilance. Seeking professional advice before investing in such a venture is the way to go. ### Yield farming DeFi 2.0 provides additional incentives through yield farming by allowing yield farm LP tokens to be used as collateral for loans. This type of investment involves using DeFi to maximize the returns that are usually calculated in APY. For instance, in “farming.” the investors might shift from one loan platform to another for better returns. ### Staking tokens Users can generate passive income for themselves by staking tokens earned through locking up crypto holdings. They can earn block rewards by becoming a validator on a blockchain network that uses proof-of-stake as its consensus mechanism. ### DEX Trading DEX stands for Decentralized exchanges. It involves crypto transactions without involving any third-party organizations. This type of trading is much cheaper as compared to traditional centralized exchanges. Although DEX Trading is decentralized in nature, it occurs in highly regulated environments because of the local laws of different states and countries. DEX trading also supports margin trading, which involves trading a financial asset using borrowed funds from a broker. ### Liquidity mining This type of DeFi 2.0 investment is also known as liquidity provision. In this investment, crypto enthusiasts earn rewards for lending their assets to liquidity pools in decentralized exchanges. These rewards are based on the share of lenders in the liquidity pool. The amount is derived from the trading fees which the traders pay who are swapping the tokens. ### Lending tokens In this type of DeFi 2.0 investment, DeFi loans are offered in exchange for interest payments. Lending tokens can offer peace of mind to both the borrowers and lenders considering the DeFi 2.0 self-repaying loans. Moreover, lending platforms can also help in improving capital efficiency. ## Conclusion In this article, we have attempted to cover all the aspects pertinent to what DeFi 2.0 is. In a nutshell, we have concluded that it offers a much better user interface and scalability than DeFi 1.0. Also, it offers good liquidity options for crypto exchanges and provides much easier ways to manage smart contracts.
What is Token Burning?
With so many new tokens emerging, one would expect the cryptocurrency community to contain many tokens with little to no value, but with the help of token burning, that’s not the case. Burning tokens is a not-so-new concept that has become popular in the crypto community, and new users are interested in it. But the method in which a project partakes in token burns can be a little complex, and you should ensure you fully understand what a token burn means for you. Reading this article will help you learn about the token burning process, how token burning can be executed, and what token burns might result in depending on how they are executed. ## What is Token Vurning? Token burning is the process by which a crypto coin project burns a certain amount of its crypto coin digital assets. The process involves transferring some amount of Cryptocurrency (specifically Token Coins) into a burn wallet address (also known as burner wallet) with no private key. Some may believe that sending tokens to a wallet address is all it takes to participate in coin burning. But coin burns are more complex than a transfer. Many projects have made several methods, terms, conditions, and incentives available for users burning cryptocurrency at a small portion. But one thing is sure; coin projects often burn large portions of their coins. Coin burning means once coins have been sent to a burn address, they become permanently excluded from the overall circulating supply of coins in the crypto coins market and, therefore, forever inaccessible for exchange or other transactions. Coin burning is similar to a company buying a large number of its shares, but it's different because coins burnt can not be resold, unlike shares. ## How Does Token Burning Work? Burning crypto is a process that can and has been executed by many individuals and developers in the coin market for several years. Some token developers like Binance have been partaking in a periodic burning of their tokens and have executed this in quarterly burns since 2020. Binance has burned around half of its total coin supply since it began partaking in cryptocurrency-burning procedures. Over 860 BNB is burned daily on the Binance platform, and a portion of the BNB burned coins are gas fees spent through the Binance BSc platform. Binance has destroyed around 2,065,152 BNB coins to partake in burns. Private keys are the only secure way of accessing coins stored in a wallet address. Therefore no one can access a wallet address with no private key. A cryptocurrency project can burn tokens by transferring them to a frozen private address; anyone can do the same with their own tokens. Various projects may differ in their methods of allowing users to partake in token burning, but the idea remains the same. By burning cryptocurrency, a project can reduce the total supply of its tokens in circulation and gradually increase its value over time. A frozen private address is a burn address with no private keys for granting access to coins. Once tokens are sent to a frozen private wallet, those tokens are automatically burnt from the overall circulation tokens in the coin market and therefore become inaccessible to any user. Another example of a method created for burning cryptocurrency is the burn portal created by Shiba Inu for burning Shib tokens and rewarding anyone who uses it. ## Why Do Crypto Projects Burn Tokens? Cryptocurrency projects burn their tokens for several reasons. However, the main aim behind such an activity is to add value to tokens still in circulation by having more personal control of the overall supply of tokens demanded. Markets function through demand and supply, and crypto projects use burning to reduce supply, increase demand and potentially add value to their crypto. Below are some reasons why projects burn crypto: ### Burning tokens Increase Value Demand and supply are economic factors that can influence the value of commodities, and those commodities can also be tokens. Cryptocurrency projects believe that the total available supply of token coins in circulation can alter the value of new coins added to the circulation supply. Such projects partake in cryptocurrency burning at large amounts that help increase the value of their tokens. Reducing the supply of token coins in the crypto market is a great way to generate value when implementing the laws of demand and supply. The value of the token coin will continue to increase as users keep requesting them even when they are few in the circulating supply. Token burning makes coins scarce. A cryptocurrency project can use scarcity to create an urgency for their community members to buy more coins, increasing value and demand over time. ### Proof of Burn Proof of Burn (also known as PoB) is a consensus mechanism that validates and adds transactions to any blockchain that implements it. With PoB, coins get burned without energy waste by consuming a few resources to mine the coins you burn, and it also grants you the ability to write blocks equivalent to burnt ones. The PoB also helps to prevent fraud by verifying the transactions of new blocks added to a blockchain network. ### Promote Mining Balance The periodic burn of sizable digital asset coins has provided a more balanced mining ecosystem by reducing the advantage early investors had over more recent investors. Now the blockchain network can benefit investors equally and provide value everyone can access. ## Pros of Token Burning
### Supporting the token value The change in the value of tokens can be significantly affected by a reduced supply of that token in circulation. This result is one that many projects achieve as they burn large amounts of their coins in circulation. ### Coin burning strengthens the Community The process of coin burning is a journey that can help a cryptocurrency community feel more involved. It builds trust in the road map and the system designed for its token community. ## Cons of Token Burning
### Permanent loss of token supply Burnt tokens are permanently excluded from the overall circulating tokens on the blockchain network, making them impossible to recover. Although the scarcity of a token may add value, that value comes from the continuous burning of large amounts of that token. Such activity leads to a constant loss of coins over time. Large amounts needed to impact the token price For burns to impact price significantly, large amounts of that token are required to be burned. Although token burning may be effective, it is expensive and can easily lead to a token project’s demise. ## Token burning risks
### Hidden whales Some companies seek a considerable gain from the devaluation of a token. These companies wait for moments when a token experiences a dip, and they buy a considerable amount of that token, only to sell it all after a little pump. Companies that partake in this are called hidden whales, and they can lead to a token burn backfiring against a token project. ### Rug pulls Some projects may pretend to strengthen their network by transferring vast amounts of their tokens to a wallet. Although these projects claim to send their community token to a burn wallet address, they send it to a wallet address where they can retrieve it. Some projects crash their tokens by doing this, which can be tragic for community members. ## Conclusion By burning, projects are providing a stable token value that can benefit investors greatly, and as we all continue to partake in token burns, the blockchain network strengthens. But the burning process can differ across several platforms, and before partaking in it, it would be best if you fully understood what it means.
What Is The Blockchain Trilemma?
The world of trading and business has seen a massive shift toward the blockchain from online banking. People prefer blockchain transactions and cryptocurrency over other forms of currency because they offer numerous benefits, such as security, anonymity, decentralization, transparency, and scalability. However, with multiple advantages, some concerns regarding blockchain networks also emerge. One of the most critical problems in the blockchain world that must be solved as soon as possible is the blockchain trilemma in addressing decentralization, security, and scalability. Only then can this industry gain true mainstream adoption. Let us have a look at this major concern known as the Blockchain Trilemma. ## What Is the Blockchain Trilemma? Blockchain technology has three major aspects: security, decentralization, and scalability. The concept of blockchain trilemma revolves around the "opportunity cost" when working with blockchain technology. It is observed when building blockchains, creators are limited to achieving only two of three benefits of the blockchain network. The concept was first introduced by Vitalik Buterin, one of the co-founders of the Ethereum network. Vitalik Buterin also proposed that Ethereum 2.0 will be the solution to this trade-off. ## What Is Decentralization? Decentralization refers to the dispersion of supervision and decision-making power from a central governing body to individual entities. Every new transaction that takes place requires verification before creating its block and adding it to the chain. The decentralized system makes sure that control over the blockchain is distributed across each individual, not in the hands of a specific group or individual. The decentralized system removes any factor of misjudgment or bias. If any validator is found accomplice in foul play, punishment proportionate to the act is directed. The authenticity of a new block is verified through a number of scattered nodes before adding the block to the chain. Hacking or altering a block is next to impossible in blockchains. All blocks need to be tempered to change something in a single block. ## What Is Scalability? The ability of a blockchain network to manage a high number of transactions by increasing the number of nodes on the platform is known as scalability. Transparency and security are the two major benefits of blockchain scalability. In many real-world scenarios, it is very hard to establish public blockchains due to the barriers to scalability. To understand the concept of scalability, let’s look at the example of bitcoin. Satoshi Nakamoto, the creator of bitcoin, set the initial size limit of bitcoin to 32 megabytes. However, others suggested that it was a waste of memory and resources because the number of bitcoin users is very low. Additionally, it is very prone to DDOS attacks. Hence Nakamkoto reset the block size to 1 megabyte to ensure stability and security in the BTC network. Up until 2013, the number of BTC transactors and the volume of transactions was very low, and due to that, there was no network congestion. However, after the dramatic rise in the popularity of cryptocurrency, the number of users has increased dramatically. This has led to many problems, such as raised transaction fees and network congestion. Scaling of the bitcoin blockchain has been the most sought-after solution. It increases the capacity to manage huge transactions. It is done by updating the code underlying the network. ## What Is Blockchain Security? Security in blockchain basically refers to integrating a complete risk management system. Trust in transactions is ensured through the core principles of a blockchain security framework, which are consensus, cryptography, and decentralization. New transactions are connected to the previous ones in a cryptographic chain, and validation of all transactions is done in a decentralized manner by a consensus mechanism. Security protocols in a blockchain can differ according to the type of blockchain. There are three main blockchains: 1. Public blockchains A blockchain with no center of control and an architectural central point-of-failure is called a public blockchain. The decentralization of a blockchain through crypto economics ensures cooperation in the public blockchain network. Usually, it uses POS and POW consensus mechanisms. 2. Private blockchains In a private blockchain, a starter/central administrator must verify and validate a user on grounds of the rules as stated by the network administrator. Businesses use private blockchains for authentication, record-keeping, and access. POA approach is commonly used for private blockchains. 3. Consortium blockchains The consortium blockchain is an amalgamation of private and public blockchains. Participants that are approved by a central entity constitute a consortium. Consensus is achieved via POS, POW, and POA. There are three factors that are used to develop a fully dynamic system. - Fraud prevention best practices. - Cybersecurity frameworks. - Assurance services. ### Solving the Blockchain Trilemma It is believed that the blockchain trilemma is a permanent problem with no solution, and developers must opt for two of three benefits to create a blockchain. However, a multitude of recent innovations across the decentralized ecosystem has introduced some solutions that have the ability to overcome these hurdles. These solutions include advanced concepts like random delegation, side chains, sharding, and Layer-1 and Layer-2. Cryptocurrency project Algorand claims that their network equally uses all three advantages by adopting the concept of randomness and solves the Blockchain trilemma. Other blockchain developers are working non-stop to try and mitigate this issue. Let us see what other potential solutions are under development. ## Layer 1 Blockchains Layer-1 (Implementation layer) is responsible for maintaining blockchain security and comprises coding rules, language, and consensus mechanisms. This layer only handles two functions: - Process of block creation. - Addition of the created block to the main blockchain. ### Consensus Protocol Improvements A consensus mechanism is used to maintain security and validate the transactions of a blockchain. Proof of History (POH), Proof of Stake (POS), Proof of Authority (POA), and Proof of Work (POW) are typically used as consensus mechanisms. Adopting a good consensus mechanism is necessary to solve the blockchain trilemma. Here are the two widely used mechanisms with recent consensus protocol improvements. ### Proof of Work (PoW) New transactions are continuously happening in the blockchain, and it is equally important for the developers to verify each one of these transactions. One central entity responsible for the verification of the integrity of a transaction is absent on decentralized platforms. To compensate for the absence of a central authority, the accuracy of a new transaction is verified using the Proof of Work technique in a decentralized network. POW networks are very energy exhaustive, meaning that the consumption of energy will only increase as more and more miners enter the network. Bitcoin and other blockchains use the POW to securely process peer-to-peer transactions without the involvement of a third party. ### Proof of Stake (PoS) The lucrative task of verifying a new transaction and creating a new block for each transaction, respectively, is delegated to a validator using the POS system. The validators stake their crypto assets in a set amount on the network and are required to validate incoming transactions on the blockchain and add new blocks. As a reward for their honest services, they are given additional crypto. On the other hand, if a validator is found trying to cheat the system or validate malicious or bad data, the network imposes penalties on them according to the severity of their actions. The POS solution consumes less power making it an environment-friendly technique as compared to POW. Additionally, due to its low power requirements, proof-of-stake is accessible to a larger audience. The costs of expensive computing systems and electricity are cut off with POS. ### Sharding Sharding is a popular scaling solution for Layer-1, the concept is taken from the distributed databases. The theme behind this method is basically "divide and conquer." The main blockchain is split into several parts, and the shards are assigned separately to individual validators. The reason for doing so is to avoid putting an excessive burden on a single central entity. Sharding poses certain risks as well because there is a theoretical possibility of all validators going down. Resulting in the loss of an entire piece of the blockchain. This issue is tackled in many ways, such as horizontal splitting of the blockchain as done by the Ethereum network. ## Layer 2 Blockchains To scale Layer-1, it is necessary to first move the processes to Layer-2, which is built on top of Layer-1. Layer-2 authenticates the transactions in Layer-1 and caters to network congestion issues. Congestion issues come into play when the user increases the network's processing power by adding more nodes. Continuous communication between the two Layers is the key to managing the main blockchain. ### Nested blockchains Another popular technique to solve the blockchain trilemma is to use nested blockchains. The parent chain defines the parameters and rules of the nested blockchain operation. However, the execution of the transaction is performed solely by the nested chain. Nested blockchains are secondary chains anchored to the main blockchain. Ethereum Plasma is the biggest example of the use of nested blockchains, this chain can arbitrate disputes by offering proof of fraud. ### Sidechains A transactional chain for large batch transactions that connects with the main blockchain through a two-way peg is known as a sidechain. The scalability and speed of the chain are regulated by a separate consensus protocol in a sidechain. The main chain manages blockchain security, and disputes in the sidechain. Sidechain transactions are recorded on a public ledger, making them visible between participants. Setting up a sidechain requires extensive infrastructure and work. On the plus side, if a security breach is observed in a sidechain, the parent chain remains unharmed. An example of the implementation of sidechains can be seen in the Bitcoin blockchain, enhancing the performance of the blockchain and reducing transaction times. ### State channels A State channel allows the transacting parties to create new channels instead of using the main blockchain. Smart contracts run the state channels, making direct P2P transactions possible. Transaction privacy is ensured in a state channel. The instant a channel is closed, the information within the channel is censored, and the main blockchain only receives the starting and ending information. Simply, a state channel enables private, off-the-chain transitions that enhance the network's security and transaction speeds. Some renowned examples of state channels are the Raiden network by Ethereum, Celer, Liquid network, and Bitcoin Lightning Network. ## Is Blockchain Trilemma Solved? There is no one-stop shop that can solve the blockchain trilemma completely. Achieving the Holy Grail is an impossible feat for developers, as of now. Optimizing a blockchain as much as possible is the best that one can do thus far. It is possible that faster network speeds and infinite virtual computing will be observed in the near future. Solving the blockchain trilemma could be very easy in such an environment. Although one cannot deny the significant strides that are made in this industry to tackle the related issues. However, at the same time, the road ahead is very hard and long, and the blockchain world is still in its amateur stage. As of now, it is safe to say that there are no projects that claim to have completely solved the trilemma of blockchain. ## Conclusion The blockchain trilemma is currently a major problem for most developers. Knowing the nature of the trilemma problem, its consequences, and its causes can help find a suitable solution. Developers are working day and night on the complexities of this trilemma and are very optimistic that it will be solved in the foreseeable future. Right now, blockchains can handle huge piles of data without any problem. However, problems in the merits of POS and POW in decentralization and security are still challenging for developers. In the near future, blockchain developers believe that the trilemma will stop being a problem for blockchain creators as the transaction speeds and security protocols will be unmatched.
What Is An Automated Market Maker (AMM)?
Automated market makers were among the first decentralized finance applications and are still among the most well-known DeFi products today. In 2018, Uniswap became the first decentralized platform to effectively use an automated market maker (AMM) system when it launched. Before then, traders could only make use of order books, which pair traders based on their bids and offers to facilitate trading on conventional centralized exchanges. This required the exchange operator to keep a price-organized list of all active buy and sell orders for each asset. Each trading pair handled by the exchange had a corresponding order book (a pair of assets that can be traded for one another). It was an effective and popular strategy except that it required that you rely on and follow the directives of a central authority. However, the need for more decentralized methods of exchange drove companies to the drawing table and that was the founding of Automated Market Makers. ## What is an Automated Market Maker (AMM)? Simply put, an Automated Market Makers (AMMs) is a decentralized exchange (DEX) protocol that uses formulas to determine the price of assets. Where centralized exchanges like Binance value assets using an order book, Automated Market Makers use a pricing algorithm. Platforms that use AMMs automated cryptocurrency trading and make it fully decentralized through the use of smart contracts and deft tokenomics. Users essentially trade against the liquidity locked within smart contracts, not the counterparties, as is traditionally the case. Liquidity pools are a common name for these smart contracts. It should be noted that in conventional exchanges, the position of a liquidity provider is only open to Businesses or the affluent. However, with AMMs, any entity that satisfies the conditions programmed into the smart contract is eligible to become a liquidity provider. Uniswap, Balancer, SushiSwap, and PancakeSwap are a few examples of AMMs. ## How do Automated Market Makers work? An AMM's primary goal is to guarantee that users can always trade cryptocurrency, even in the absence of counterparties with matching offers. Because of this, AMMs do not rely on order books to set up trading pairs. Instead, they use smart contracts to manage unique crypto asset pools created especially to supply the liquidity required to support frictionless trading. For example, when trades take place on a decentralized exchange like Kraken, it is directly between user wallets. In other words, if you sell BTC for ETH or SOL, there is a buyer of ETH using BTC on the other side of the exchange. This transaction can be described as peer-to-peer (P2P). AMMs, on the other hand, might be thought of as peer-to-contract (P2C). Since trades take place between users and contracts, counterparties in the conventional sense are not required. There is nothing like order types on an AMM because it doesn’t use order books. Instead, a formula determines the price you will receive for an asset you want to buy or sell. Though it's important to note that some potential AMM designs in the future might overcome this restriction. Furthermore, what are called trading pairs on centralized exchanges exist on DEXes as Individual "liquidity pools". For instance, you would need to locate a BTC/ETH liquidity pool if you wanted to exchange Bitcoin for Ether. AMMs employ predetermined mathematical calculations to ensure that the ratio of assets in liquidity pools is as balanced as possible and to get rid of inconsistencies in the pricing of pooled assets. For instance, top DeFi exchange protocol, Uniswap, and many other DeFi systems establish the mathematical relationship between the specific assets maintained in the liquidity pools using the straightforward x*y=k equation. Here, x signifies the value of Asset A, y stands for Asset B, and k remains a constant. In essence, the liquidity pools of Uniswap always maintain a condition in which the result of multiplying the prices of Assets A and B is always the same. This guarantees that consumers can always get a quoted price for their chosen deal as long as there is enough liquidity in the pool. This leads to the next question: ## What is a Liquidity Pool? From the above definitions, it is clear that Automated Market Makers rely heavily on Liquidity pools to facilitate trade. Let us now examine what liquidity is and the process through which these DeFi Protocols maintain their liquidity. A liquidity pool is a reserve where individuals or businesses can deposit crypto assets which will then be used to enable future transactions. Similar to how FX traders buy and sell currency pairs, liquidity pools normally accept two cryptocurrency pairs. For instance, a trader can use an AMM to sell Bitcoin (BTC) and buy Ether (ETH) from a BTC/ETH liquidity pool, and vice versa. Some liquidity pools and AMMs simultaneously manage multiple cryptocurrencies depending on the AMM and decentralized exchange. ## What is a Liquidity Provider? As mentioned earlier, centralized exchanges usually only accommodate dedicated market makers, companies, and extremely rich individuals. However, Automated Market Makers have made it possible for literally anyone to deposit assets in their liquidity pools. These individuals or business entities are called liquidity providers. With AMMs, anyone who satisfies the necessary criteria can act as a liquidity provider. Although the specifications differ amongst liquidity pools, most smart contracts demand that you deposit a specific amount of tokens which is usually a substantial amount, typically in the form of cryptos like Ether, Bitcoin, or Binance Coin. In turn for providing this liquidity, providers get network fees from all trading activity taking place within their liquidity pool. It's one of several ways bitcoin owners can use their holdings to generate passive income. ## Impermanent loss Notwithstanding although, passive income is always attractive to investors, there are dangers connected to contributing to liquidity pools, one of which is Impermanent loss. This occurs when the same tokens have different values within and outside of a liquidity pool. Since the price-adjusting algorithms of liquidity pools only care about maintaining a balance between the values of the assets within a pool, when the price ratio changes, the pools adjust to fit. Withdrawing your assets from a liquidity pool when this adjustment is unfavorable can result in a loss. Of course, the loss only occurs if you remove the assets from the pool which is why it is called impermanent. However, Keeping your assets locked in a liquidity pool for fear of impermanent loss also prevents you from taking advantage of other profitable chances. Hence stablecoin or wrapped token pairs, as well as other token pairs with similar values, operate well with AMMs as opposed to those with larger ratio gaps. Impermanent loss is usually insignificant if the price ratio between token pairs remains within a modest range. Just be sure you understand the concept of impermanent loss in relation to your preferred AMM before locking your funds into their liquidity pools. ## Concentrated Liquidity Concentrated liquidity is one of the newest developments in AMM development. In fact, it is one of the hallmarks of the most recent version of Uniswap, v3. This particular feature is intended to increase the effectiveness of the price-adjusting process, reduce slippage, and enable liquidity providers to charge larger fees. With concentrated liquidity, Liquidity Providers can allocate assets to particular price points. Liquidity Providers can design unique price curves that suit their preferences by combining various concentrated liquidity positions. Additionally, this enables them to get trading commissions based on the liquidity offered at particular price ranges rather than the liquidity of the entire pool. ## Constant Product Formula The Constant product formula is a mathematical formula introduced by Ethereum founder Vitalik Buterin which is as follows: tokenA_balance(p) * tokenB_balance(p) = k Uniswap later adapted it to the more popular x * y = k formula In practice it works like this; token price in a liquidity pool is determined by the constant, "k," which denotes a constant asset balance. In an ETH/BTC Liquidity pool, the price of ETH increases every time it is purchased since there is less ETH in the pool than there was before the purchase while the corresponding BTC in the pool decreases in price. In contrast, when more ETH is added to the pool, the price of BTC increases. This allows the pool to maintain a steady balance where the combined value of ETH and BTC in the pool is always equal. In the end, whatever the level of price volatility, there will eventually be a return to a condition of equilibrium that reflects a fairly accurate market price. The strategy encourages traders to profit from price discrepancies between the AMM and other crypto exchanges until it is balanced again if the AMM price strays too far from market pricing on other exchanges. ## Automated Market Maker Variations 50/50 token pair pools: This is the type of AMM operated by Uniswap. This ground-breaking technology enables users to construct a liquidity pool using any pair of ERC-20 tokens in a 50/50 ratio. It is, so far, the most reliable and oldest AMM model on Ethereum. Multiple assets liquidity pools: Instead of having just a trading pair in one liquidity pool, some Protocols find a way to stretch it. For example the Automated Market Maker, Balancer goes one step further than Uniswap. By enabling customers to build dynamic liquidity pools of up to eight different assets in any ratio, Balancer pushes the boundaries of Uniswap and increases the adaptability of AMMs. Similar Assets Liquidity pools: Another AMM model is the type operated by Curve where digital assets of a similar class such as stablecoins get locked in the same liquidity pool. This enables it to provide effective trades, and offer some of the cheapest deals and rates in the market while addressing the liquidity issue. ## Popular DeFi Platforms Using AMM
### Uniswap
What Are Liquidity Pools? DeFi Liquidity Explained
The cryptocurrency market is a very active community that initiates thousands of transactions to be verified daily, but verifying transactions can be pretty slow. Crypto liquidity pools provide a faster means of turning digital assets into cash, and this option can be helpful for people who make frequent transactions. This article will inform you about liquidity pools, how they work, and several other things you should know about them. ## What is a liquidity pool? A liquidity pool is a smart contract containing large portions of cryptocurrency, digital assets, tokens, or virtual coins locked up and ready to provide essential liquidity for networks that facilitate decentralized trading. A decentralized exchange relies greatly on liquidity because of the regular rate at which transactions are made on their network; for this reason, decentralized exchanges need to be connected to liquidity pools that can help maintain a steady functional network that doesn’t delay transactions made by traders. In crypto liquidity pools, digital assets are locked and ready for exchange. Liquidity pools serve as a digital asset reserve that can provide liquidity to help speed up transactions for decentralized finance (also known as DeFi) markets such as decentralized exchanges (also known as DEX). Unlike traditional finance, which pairs buyers and sellers to complete a transaction, liquidity pools do not need to connect users to complete a trade. Instead, they function automatically through automated market makers (amms) that connect you to the smart contract with your requested digital assets locked up in them. Automated market makers are algorithmic protocols that determine digital asset prices and automate asset trades on liquidity pools. A liquidity pool gathers its assets through users called liquidity providers (also known as LPs), who contribute to a percentage of the crypto asset in a typical liquidity pool smart contract. ## How do liquidity pools work? Liquidity pools use automated market makers (AMMs) that connect users aiming to trade pairs with the appropriate smart contracts for them. AMMs are the protocols used to determine the price of digital assets, and it does a great job of providing the most reasonably accurate market price on liquidity pools. Before liquidity pools can achieve their principal function of providing enough liquidity for crypto markets worldwide, they will require the tokens of liquidity providers. To become a liquidity provider, you can adapt the steps below to any liquidity pool platform of your choosing: 1. Credit your crypto wallet with the crypto tokens you aim to lock up in a liquidity pool and connect it to the liquidity pool platform of your choosing or sign up on a liquidity pool platform and credit the liquidity pool wallet of your account on that platform’s wallet. 2. Find the trading pairs you’d like to invest in and deposit an equally divided portion of your crypto investment into that trading pair; for example, to invest $1000 into an ETH and USDT trading pair, you would need to deposit $500 each in both ETH and USDT on that liquidity pool. Once you’ve made your deposit, select the period you want to have it locked up in the pool. After the period of lockup has elapsed, you, as a liquidity provider, will be rewarded with liquidity pool tokens according to your selected trading pair and liquidity pool platform. However, during the lockup period, you will also acquire an earning portion of the transaction fees paid to make exchanges with the pool you committed your crypto. Some crypto liquidity pools also provide the option of staking liquidity pool tokens in exchange for earning the platform's native token. ## Why are liquidity pools important? Liquidity pools play a significant role in providing liquidity in illiquid markets and boosting the DeFi ecosystem. The low liquidity that peer-to-peer exchanges offer can slow down the speed of transactions in financial markets. Still, with the help of liquidity pools where tokens are locked up in smart contracts, people can make transactions quickly. The price of assets on crypto liquidity pools is also very fair. They can only be influenced by the current market exchange rate, which offers relatively accurate prices for the assets they supply to liquidity pool intelligent contracts. Unlike traditional exchanges, where buyers and sellers can influence the bidding price of their transactions with other traders, liquidity pools provide a more consistent environment where prices can be more accurate. ## Pros of liquidity pools
### Faster transactions With sufficient liquidity being provided through liquidity pools, you can make faster transactions and turn your tokens into cash within a shorter period. Liquidity pools provide a faster means of making transactions than P2P exchanges, which require traders to release assets, verify trades and spend some time making transfers needed to complete the exchanges. Liquidity pools already have reserves of the crypto pair you wish to exchange, allowing for faster, trustworthy exchange. ### Secured exchange with reduced possibility of scam The process through which users of liquidity pools acquire their crypto pairs is secure compared to that of a P2P transaction. P2P transactions require two users to trust each other to complete their end of the contract. Still, with liquidity pools, automated market makers (amms) automatically connect users with contracts containing their trading pairs. Amms also releases the crypto already locked up in smart contracts. With such a system, people making transactions on a crypto network can quickly receive their assets without the possibility of the other trader refusing to release them. ### Fair price on exchanges Prices offered for exchanges on liquidity pools are not influenced by bias or greed, which P2P exchanges can be affected by because traders determine the trading price of their exchanges. Amms provides the market price for making exchanges on liquidity pools, and the prices amms provide are based on authentic information that users can trust. ## Cons of liquidity pools
### Scam Liquidity Pools The smart contract code of a liquidity pool may be accessible to developers. Developers with such access can breach the smart contract by obtaining all your assets locked in the liquidity pool without your permission. For this reason, users of liquidity pools are advised to do extensive research on the integrity of the liquidity pools they connect to their wallets and read the terms and conditions of the smart contract they join. ### Risky price change Since Automated Market Makers (AMMs) determine prices on liquidity pools, assets locked up in their smart contracts are subject to constant change. Amms constantly update the prices of trading pairs on the list of trading assets they offer on pools. ### Impermanent Loss The change in prices offered by liquidity pools can lead to a significant loss or gain of assets stored in the pool. The crypto market is volatile, and a tremendous price change can lead to losing assets locked up in a pool. Volatile changes can easily affect small asset portions, and lost assets may be unrecoverable for investors who only lock up a small asset portion to a liquidity pool. ## Trending liquidity providers
### Balancer
What Is Ethereum 2.0 - And Why Is It So Important?
Back in 2015, Vitalik Buterin launched the Ethereum network. At that time, he designed the Ethereum network to function through a proof of work consensus model and serve as an Ethereum blockchain platform where anyone could execute many activities at high speed. The Ethereum network proof of work consensus model has a not-so-complex block reward mining process where complex mathematical puzzles verify transactions on the Ethereum network. Through proof of work, Ethereum miners use mining to validate Ethereum transactions made on the Ethereum network and earn rewards for participating in the Ethereum ecosystem. Recently, the Ethereum network went through two upgrades. Initially, the first upgrade was from proof of work Ethereum mainnet to a separate new network – a proof of stake beacon chain, created to serve as a new and improved Ethereum blockchain. The proof of stake model is a consensus mechanism where Ethereum miners earn more block rewards depending on how much staked Eth they already have on the Ethereum network. The Ethereum Foundation identifies the proof of stake layer as the "consensus layer or beacon chain," and the proof of work layer as the "execution layer or Ethereum mainnet." However, the Ethereum community identifies "Eth2" & "Eth1," as the "consensus" & "execution" layers, respectively. After testing the proof of stake consensus layer as a separate layer, the Ethereum foundation has brought about the merge. The merged Ethereum network is the second upgrade to the Ethereum network and is currently used to validate the blocks of transactions on the Ethereum blockchain. After this read, you will realize the stages the Ethereum network has gone through and how they function to provide users with a scalable network. ## What is the Ethereum Merge? The Ethereum Merge is the second phase of the upgrade and the current Ethereum network that combines two different consensus mechanisms. The Ethereum mainnet and the Beacon chain are the consensus models that make up the Ethereum Merge. On Ethereum's merged block, the Ethereum mainnet and the Ethereum beacon chain function through proof of stake. The merge signifies the complete change to the proof of stake validation protocol that utilizes staking services. The Ethereum Merge now serves as a separate blockchain, swapping proof of work with the proof of stake validation process. ## What is Ethereum 2.0? Ethereum 2.0 (also known as Beacon chain) is the first upgrade that validates transactions through the proof of stake consensus mechanism, unlike Ethereum 1.0, which validates transactions using proof of work. On the Ethereum 2.0 network, validators of Ethereum transactions can earn more by staking rewards. Ethereum 2.0 requires fewer gas fees and maintains the decentralized way users love to process transactions on the Ethereum blockchain. The Ethereum 2.0 upgrade also provides a platform where users can process more transactions simultaneously. The only discomfort regular miners might experience through this upgrade is that for anyone to partake in a validation process, they must stake a minimum of around 32 ETH tokens. But anyone can still join one of the many staking pools to make up the difference. A staking pool combines several stakers aiming to achieve the total staking amount required to become a validator on Ethereum's blockchain. ## Ethereum 1.0 vs. Ethereum 2.0: What’s the difference? Ethereum 2.0 functions on pos blockchains, while Ethereum 1.0 functions on pow blockchains. With pos blockchains, the Ethereum network's scalability is far higher than when it used just the pow blockchain. Ethereum 2.0 provides an increased level of transaction speed. It provides a platform where users create secure smart contracts faster than before. ## What is Proof-of-Stake (PoS)? Proof of Stake (or the PoS blockchain) is a consensus layer that allows users to earn more by staking eth tokens over time. The more you stake, the more block rewards you can earn. The Proof of Stack model has increased the Ethereum network's scalability by a tremendous amount. The Ethereum network now provides an even more cost-friendly service approach to validating Ethereum transactions and earning a fair share of rewards. A staking pool is easy to join. To become a validator, all you need to do is join staking pools. Ethereum 2.0’s proof of work verification process has increased the number of people who can participate in validating Ethereum transactions, adding a boost to the Ethereum ecosystem. ## Ethereum 2.0 Roadmap The upgrade to Ethereum 2.0 has gone on since 2020, and these are the phases which it went through: ### Phase 0 This phase was the launch of Ethereum 2.0's beacon chain. During this phase, the beacon chain could only execute some activities on the execution layer as a live blockchain test. ### Phase 1 In this next phase, Ethereum 2.0 implements shard chains. Shard chains are the separate chains that will make up Ethereum's blockchain after this phase. Shard chains are a huge factor in increasing the scalability of Ethereum's network. ### Phase 1.5 Phase 1.5 is the merge phase that brought the pow and pos chains together to form one pos chain. This phase did not affect any users of the former pow chain, and it provided a barely noticeable smooth transition. ### Phase 2 This phase needs to be more detailed but believed to be when the beacon chain can fully partake in all Ethereum network functionalities, such as the pow execution layer. At this phase, Ethereum 2.0 will function at its full capabilities. ### Ethereum 1. x This final phase also needs to be more detailed. It is described as a developmental phase where Ethereum developers strive to improve Ethereum 1.0 as users continue to enjoy the benefits of Ethereum 2.0. ## Benefits of Ethereum 2.0
### Greater scalability The proof of stake layer that Ethereum 2.0 functions on provides Eth holders with better, more considerable returns on their staked Eth. The Ethereum 2.0 network rewards Eth holders depending on the amount of Eth they retain on the Ethereum network, and this means the more Eth you stake, the more reward you can earn as a Validator. The new validation method is more cost-effective and an excellent method of increasing earnings by saving Eth. And with shard chains that enable 9,970 more transactions than the initial 30. The rate at which you can earn will increase at a faster rate. ### Increased decentralization Ethereum 2.0 provides more decentralization than Ethereum 1.0 did. It further strengthens the trend of decentralization in the crypto market. By implementing the proof of stack validation method, more people can become validators through staking pools or by staking their own Eth to become validators. A more significant number of Validators has emerged since the launch of Ethereum 2.0, and that has further increased the decentralized network of Ethereum transactions. ### Enhanced security Ethereum 2.0 uses proof of stake to validate transactions faster than Ethereum 1.0. With the increased speed Ethereum 2.0 processes transactions, Ethereum 2.0 has added many more layers to the already dependable level of security it provides. On Ethereum 2.0, Validation is faster. With proof of stake, Ethereum 2.0 has gathered a more significant number of Eth holders staking Eth, which they need to remain online to maintain. By locking down staked Eth, Ethereum 2.0 has provided a robust and reliable level of security for its users. ### Faster and cheaper transactions With Ethereum 2.0, the Ethereum community can validate transactions faster and experience reduced transaction fees. The new speed at which transactions can get processed simultaneously ensures that users of the Ethereum proof of stake network can enjoy a more excellent user experience. Ethereum 2.0 allows users to quickly and speedily execute activities with a less disruptive workflow. Ethereum 2.0's proof of stake transaction method also reduces the money spent on powering mining machines to maintain the Ethereum network. ## Conclusion The successful launch of Ethereum 2.0 is a major upgrade to the level of services provided by Ethereum. The Ethereum foundation believes that this major upgrade has increased Ethereum's network's scalability to a level of better-optimized cost. Ethereum's price on the crypto market has responded well to the upgrade to Ethereum 2.0. The upgrade will not only moderately decrease the electricity consumption required to validate Ethereum blockchain transactions, but it will also increase the rewards earned from it. Several crypto enthusiasts have tweeted that Ethereum's price on the crypto market might experience a drop post-merge. But the new Ethereum network is doing a great job, and you better believe the Ethereum foundation has much more innovation ready to share with the crypto market.
What Is a Crypto Whitepaper? A Detailed Look At These Publications
A whitepaper is a piece of information or a guide crafted in an academic layout to inform the readers about some specific issue. For instance, marketers use whitepapers to promote their products. Developers use whitepapers to elaborate on their project's new improvements and technologies. Another major use for whitepapers can be seen in the government sector, where authorities publish legislation and policies to gauge public opinion. Crypto companies have also started using whitepapers to promote their crypto projects. Let us discover what a crypto whitepaper is and its importance in the world of blockchain. ## What is a cryptocurrency whitepaper? Crypto whitepapers are basically a user’s guide that aims to attract investors for the currency. When a new crypto is released, the launching company publishes the details about the currency in the form of a whitepaper. The paper aims to explain commercial, technical, and financial information about the currency. The companies include facts, statistics, formulas and diagrams about the currency to emphasize the importance of buying this currency. Although writing a whitepaper is not necessary for every company that intends to launch a cryptocurrency, a whitepaper gives a sense of professionalism and legitimacy to the company and the new currency. A legitimate and professional business allows investors to understand better how and why this new currency is better or different from its rivals. A white paper usually follows very moderate and plain language that every potential investor can understand. Even a common man with basic knowledge about blockchain who reads it just for information can grasp the fundamentals. ## 7 questions every whitepaper should answer about a crypto project There are some questions that a good whitepaper must answer. ### Concept: What is the project about? The concept of a whitepaper refers to the introduction of the crypto project that is being launched. This section is a quick summary of the program and gives a general idea of what problems the cryptocurrency aims to address. ### Operations: How does it work? A major part of a well-written white paper discusses the working and operation of the new cryptocurrency. Two main themes covered under this vast umbrella are “what will be the project's goals?” and “how will it accomplish its goals?” ### Validation: Why do people need this project? Investors and interested parties are keen to know how a new project would fulfill their needs. It must be able to clearly convey why someone would want to invest in or use that program. ### Technology: Why is this project on the blockchain? The new advancements in terms of technology in the crypto project should be clearly stated in the white paper. The publication must be able to defend how it is relevant to the current blockchain world and user needs. ### Tokenomics: How does the token fit into the picture? Supply and demand play key roles in the success and failure of a crypto project. It should be able to justify that the currency is relevant to the needs and fits perfectly in the law of supply and demand. ### Team: Who’s behind the project? Crypto whitepapers should include a section dedicated to introducing the employees, funders, advisors, and founders of the cryptocurrency. The section aims to inform the readers about the team's expertise, skills, and relevance to the program. ### Roadmap: What are the project’s plans? A roadmap gives the reader an idea of the project timeline as well as the authenticity of a crypto whitepaper. Usually, it is a good practice to devise monthly or quarterly goals for the cryptocurrency project and add them to the whitepaper. ## Why are whitepapers important? Whitepapers hold critical value in cryptocurrencies as they aim to introduce a new cryptographic project to the world. This document contains the most in-depth information about the functionality and creation of a cryptocurrency: hence researchers and developers looking for a detailed understanding of a project use whitepapers as the main resource. A whitepaper publicly states every nitty-gritty detail about the cryptocurrency. This ensures that there is no hidden information or motive behind a crypto project. Additionally, investors can compare the attributes with pre-established cryptocurrencies and decide whether it is a good investment opportunity or not. ## Useful concepts to understand a crypto whitepaper Understanding crypto whitepapers can be very tough for someone new to this field. Thus, it is recommendable to gain familiarity with the following basic concepts: ### Blockchain Blockchain is basically a decentralized, distributed digital ledger made to store and secure data. It can include information regarding Decentralized Finance smart contracts, crypto transactions or NFTs (non-fungible tokens). The difference between conventional data storage and blockchain is the decentralization of authority. It has four types based on the level of permissions each is controlled with. The types are Public, Private, Hybrid, and Consortium blockchains. ### Consensus mechanism A consensus mechanism is set in place to build trust, integrate security and achieve an agreement across network. A consensus mechanism is very useful in keeping precise records of transactions made on the network. In the world of crypto, Proof of Work and Proof of Stake are the two most frequently used consensus mechanisms. ### Nodes In blockchain and cryptocurrency, a node refers to the devices of individual network stakeholders authorized to facilitate communication for network processes and to keep track of the blockchain ledger. The main purpose of a node is to validate and verify every incoming transaction and continue adding new blocks to the main chain. There are two main categories in which nodes are classified: Full nodes and Lightweight nodes. ### Mempool Mempool is a portmanteau of two concepts: transaction pool and memory. When network nodes are assigned a new transaction, they run several verification checks to ensure the transaction is valid. This process is often quite time-consuming. During this process, a mempool mechanism offers a place for the suspended transaction to stay. ### Soft-forks and Hard-forks A Soft-fork is fundamentally a new change that is added, or an existing function is modified without bringing about any change in the blockchain structure. A Hard-fork refers to a change in the blockchain protocol that changes the status of a transaction from invalid to valid. ### Governance In blockchain terminology, governance involves the concepts of control and decision-making power. Maintaining decentralization in a project also requires some level of governance to tackle uncertainty, cost issues and delays in network processes. Methods and the level of governance vary along different types of blockchain projects. ### Smart contracts These are automated programs in a blockchain whose conditions are predetermined by the transacting parties. The purpose of a smart contract is twofold. First, to build trust between the participants of the transaction and second, to automate the process flow and automatically trigger the next action in line once the necessary conditions are fulfilled. ### NFTs Crypto assets that are identified with unique codes are known as Non-fungible tokens (NFTs). Additionally, the unique metadata assigned to each asset makes them distinguishable from other NFTs. Music, real estate, artwork and any other real-world assets that one can think of can be represented as NFTs. ### DeFi DeFi is a shorter version of the term “Decentralized Finance”, DeFi refers to fairly distributing authority and decision-making power among all stakeholders. This system aims to inject authority and trust among individual P2P digital exchanges and challenge the traditional centralized banking system. DeFi provides individuals with their own digital wallets, allowing them to hold or transact their assets as per their requirements. ### Staking Staking allows stakeholders to earn a passive income by holding a certain amount of cryptocurrency in their accounts. The staker (validator) is assigned a transaction to be verified. Upon correct validation, the network rewards the validator with more crypto. The amount of crypto held determines the chances of a node being selected as a validator. The more crypto held in a wallet, the more chances of selection. ### GameFi GameFi is an amalgamation of Gaming and Finance; this concept brings together advanced gaming and blockchain technologies, such as cryptocurrency and NFTs. GameFi allows the players to earn crypto for the time and effort spent in a game. The players can monetize and shift their progress and rewards earned in a game to other games as well. ## Examples of cryptocurrency whitepapers
### Bitcoin whitepaper Bitcoin is the most popular cryptocurrency of all time. Satoshi Nakamoto published the well-known Bitcoin whitepaper in 2008. The paper was named “Bitcoin: A Peer-to-Peer Electronic Cash System”. ### Ethereum whitepaper The whitepaper for one of the most successful cryptocurrencies was written by the 20-year-old Vitalik Buterin in 2014. The idea for the paper “Ethereum: A Next-Generation Smart Contract and Decentralized Application Platform” was proposed in 2013. ### Solana whitepaper Solana's paper describes Proof-of-History and highlights its current plans. Anatoly Yakovnko published “Solana: A new architecture for a high performance blockchain v0.8.13” in 2017. ### Polkadot whitepaper Polkadot paper and the respective open-source cryptocurrency were both released in 2020. The author of the paper “Polkadot: Vision For a Heterogeneous Multi-chain Framework” was Dr Gavin Wood. ### Decentraland whitepaper This paper focuses on the economical and technical approaches and motivation behind the project “Decentraland.” The paper was published in 2017 by Esteban Ordano, Ariel Meilich, Yemel Jardi, and Manuel Araoz. ### Sandbox whitepaper Although Sandbox was launched in 2011 by Pixowl, its latest version was released in 2021 under the name “The Sandbox.” ### SENSO whitepaper This crypto whitepaper details the use cases of SENSO, the in-platform currency of Sensorium Galaxy, as well as revealing a number of features and future plans attached to the project.
### Conclusion A whitepaper is a document that provides the reader with the necessary information required to learn about a crypto project and gives the investors an idea about whether the project is worth investing in or not. Crypto companies mostly publish whitepapers to catch the attention of potential investors and users. The papers are usually in simple and understandable language; however, a reader needs to have some basic knowledge of the fundamentals of blockchain and crypto to understand a crypto whitepaper fully.
Best NFT Rarity Tools
The exponential growth of the NFT space is making even the most skeptical investors take an interest in this market. Aligned with this rising enthusiasm, demand for the best NFT tools seems equally affected as investors try to identify the next best non-fungible asset out there. Rarity reigns supreme when it comes to getting the most for your money in any collectible market. It is essential that you track trending NFTs if you want to turn a profit. Sniping NFTs is the act of buying NFTs that are priced below their value due to the seller's unawareness of their rarity. Fortunately, there are rarity tools, often referred to as rarity sniper tools, to help you with that. This article introduces you to the concept of NFT rarity and reviews some of the top NFT tools currently available. Let's get to it.
## What Is NFT Rarity? Several new NFTs have hit the market, but how do they differ in trait value? What makes some NFTs sell for millions while others sell for less? It has to do with rarity. NFT rarity determines how rare and valuable an NFT is. Collectors highly prize truly rare NFTs, which makes them more expensive. Consequently, people want to know whether the NFT they own is rare or whether the one they plan to purchase is rare. ## NFT Rarity Calculation Methods It is possible to calculate the rarity of an NFT using several methods. By calculating the rarity of an NFT trait based on its rarest trait, taking the average rarity of traits, or examining rarity statistics. ### Trait NFT Rarity Ranking To compare NFTs, one can simply compare the rarest attribute of each non-fungible token. Yet, this approach has one significant flaw despite its simplicity and straightforwardness: it ignores the NFT's overall rarity, just focusing on the rarest one. ### Average Trait Rarity Another method that will help you check NFT rarity is to average the rarity of traits present on the NFT. If an NFT had two traits, one with a 50% rarity and one with a 10% rarity, then its average trait rarity would be (50+10)/2 = 30%. The problem with this method is that it stresses the overall rarity of every trait, which means the single super NFT rare trait does not receive enough trait value, and the overall rarity value is diluted.
### Statistical Rarity In this method, you multiply all of an NFT's traits together to determine the NFT's overall rarity. If an NFT has two traits, one trait has a weight of 10%, and the other has a weight of 50%. That NFT would have a 5% 'statistical rarity' (10% * 50%). These three approaches have different results when comparing the rarity of some NFTs. Average Rarity and Statistical Rarity tend to overvalue many of the traits in an NFT, potentially diluting the value of an ultra-rare, one-of-a-kind trait. Trait Rarity faces the complete opposite problem by narrowing the calculation to the single rarest trait. A solution? Rarity Score.
## How to Calculate NFT Rarity The value and rarity of NFTs differ even if you have thousands of them in a single collection. Therefore, a decrease in supply leads to a rise in demand, which drives NFT prices up. However, supply value is not the only factor contributing to NFT rarity. To get an NFT rarity calculated, you can opt for various methods, as we already mentioned. Different parameters, such as rarity based on the rarest trait, will be considered by assessing all NFT traits statistically or by calculating the average rarity. A Rarity Score is therefore used to calculate the rarity of an NFT. Calculating the Rarity Score does not need to be done manually since various rarity tools can do it for you. With the right NFT rarity tool, you can view the results in just a few clicks. Rarity Score stresses single rare traits while including overall trait rarities in its calculation. To date, this is by far the best way to calculate rarity. Here's the formula: > [Rarity Score for a Trait Value] = 1 / ([Number of Items with that Trait Value] / [Total Number of Items in Collection])
## Best NFT Rarity Tools Although the formula is pretty straightforward, there's no point in doing all that math on your own to estimate the rarity of all of your desired NFTs. There are several investment tools available to assist you. Investments in NFTs come with many risks. Using a reliable NFT investment tool can help you check NFT rarity and stay on top of the changes effortlessly. Needless to say, these tools shouldn't be used as the only criterion for buying NFTs. Make sure you research the NFT market and project in question well before making a purchase. ###
What Is Crypto Cold Storage and How Does It Work?
When it comes to crypto, having a good investment strategy might not be enough. That’s particularly true these days, with a volatile market, a dragging crypto winter and the blowout of major crypto players shaking users all over the world. If you're looking to offset risk and give yourself some peace of mind, perhaps you’ll consider keeping your digital assets in cold storage. A cryptocurrency wallet is essentially a digital account for your virtual money, enabling you to receive, send and store your assets with ease. However, there is a difference between keeping your crypto online and offline, especially if you’re concerned about the safety of our coins and tokens. If you’re interested in moving your crypto into cold storage, here’s how to get started. ## What Is Crypto Cold Storage Cold storage is a term used to describe an offline storage system. An example of a physical medium used for cold storage is a piece of paper or an engraved piece of metal. When it comes to cryptocurrencies, cold storage is offline storage of the codes - called keys - that allow your assets to be managed. Since your crypto wallet is offline, it’s almost impossible for it to be hacked or used by an unauthorized party, making it one of the safest ways of storing cryptocurrency. Besides not being connected to the internet, a cold crypto wallet gives the user a private key, passphrase, password or some other form of encryption protection that becomes the only way of accessing the wallet. But while there are many advantages in opting for a cold storage strategy, it’s worth bearing in mind that your assets will be harder to trade quickly as you’ll have to go through more steps in accessing your portfolio. ## Why Use Crypto Cold Storage The crypto market has been upended by a series of crashes and the downfall of lenders such as FTX, prompting many in the space to either sell their assets or consider alternative options to keeping their net worth safe. The fall of FTX, for example, had led to questions over the advantages of using centralized crypto exchanges over decentralized alternatives. While these platforms are no doubt convenient, they are exposed to significant risks such as hacks, data breaches, liquidity issues, bankruptcy, not to mention that users can only access their funds through the exchange. If the platform is somehow compromised, you might never see your money again. Taking complete ownership over your digital assets, keeping them in a wallet and taking them offline can help mitigate some of those risks. ## Hot Storage vs Cold Storage There are two kinds of crypto wallets users can typically choose from: hot and cold, each offering a different range of features. Cold wallets can be divided into: ### Paper Wallets As the name indicates, a paper wallet is simply a piece of paper where you’ll find your public and private keys printed or even written down. This offline method can be a safe way of storing and managing your crypto since hackers have no way of accessing your wallet keys. That said, losing a paper wallet might result in you losing all your assets since you won’t be able to use your keys. ### Hardware Wallets A hardware wallet is an external physical device where you can store your keys, normally a Bluetooth device or a USB stick. Moreover, transactions can normally be approved only after its user pushes a button on the device, meaning that remote unauthorized third parties would have a hard time trying to get away with your money. The biggest advantage of cold storage is that you can’t hack a piece of paper or an external device that’s not connected to the internet. On the flipside, cold storage wallets can seem quite impractical since there are quite a few steps involved in accessing your crypto. A hot wallet, on the other hand, lets you store your keys on a platform or application such as web-based, desktop or mobile wallets, connected to the internet, meaning that your funds are more easily accessible and you can carry out day-to-day transactions with greater ease. Most hot wallets are also free. However, they can leave users open to vulnerabilities that can be targeted by hackers. ## Types Of Cold Storage Wallets There are a number of cold storage wallets currently available, although you should keep in mind that not all options might support every token you have. Here are the top three most popular options: ### Ledger
What Are Fan Tokens? All You Need To Know
This constantly changing and developing era of modernization and technology is bringing new and exciting platforms for users to participate in and engage with. Cryptocurrency, the technology featuring a new form of money exchange, is now reaching new heights. Multiple new concepts that were unthinkable a few years back are now ruling the market. One such concept is that of fan tokens, and it has been a major attraction, especially among sports fans.
A glimpse at 2020 shows that every business and industry suffered huge setbacks, yet cryptocurrency and related services performed remarkably well. Many institutions, especially sports clubs, have adopted new ways to make money and raise funding for their programs. Sports clubs launched fan tokens that brought in a new form of fan participation through cryptocurrency. ## What are fan tokens? Fan tokens are a special kind of cryptocurrency that gives holders access to various fan-related activities. These fan-related activities include voting in some of the club decisions, special match ticket discounts, teams’ bus designs, etc. These are just a few examples of what could be the possible activities that are offered by fan tokens. ## NFTs vs Fan Tokens Fan tokens give fans memberships and allow them to gain exclusive offers and have a voice in the team's decisions like never before. Fan tokens are replaceable with other such tokens, making them ‘fungible’ as opposed to Non Fungible Tokens (NFTs). ## Rise of Fan Tokens Prominent sports clubs like AC Milan, Inter Milan, Santos FC, and FC Porto, etc., are the initiators of fan tokens. Initially, fan tokens sparked during the COVID-19 lockdown. Sports organizations needed an alternative to generate revenue that was impossible due to Covid restrictions. Many organizations plan to launch their digital assets after seeing the waves they have created for other clubs. Some major sports clubs which sell fan tokens are FC Barcelona, Manchester City, etc. Of late, many US sports teams are expected to join in on the hype, while some associations like NFL, NBA, and NHL have reached agreements with Socios. ## How Do Fan Tokens Work? Fan tokens operate on a no-fixed-value principle, meaning their weightage comes from the value of fan participation and involvement. Fan tokens have a fluctuating value. Initially, a fan token is offered at a fixed starting price. Then, it either gains or loses value over time. Fan tokens determine the shape of fan activities, participation, and revenue streams for sports teams offering those tokens. ## Using a fan token is one of the leading platforms for buying fan tokens through the currency ‘Chiliz ($CHZ)’. People who buy a fan token can then earn rewards, win prizes, and get involved in several activities, like deciding the team's motto. Other perks associated with these crypto assets are meets-and-greets and easy access to signed objects distributed by stars of the fans’ favorite teams and clubs. Sometimes, teams offer exclusive promotions to fans with the number of owned fan tokens equal to or more than a specified threshold. ### More the Merrier More tokens mean more privilege and access to the activities. Fans have more say in the decisions of the fans’ respected teams or even individual stars that you bought the fan tokens for! ## Fan token vs DAO token Fan tokens are analogous to DAO governance tokens. A governance token allows token holders to decide and have a say in tech issues. Fan tokens can be considered a way of expressing ‘team patriotism’ by fans. ## Types of fan tokens Different sectors have introduced multiple kinds of fan tokens. Sports tokens and music tokens are the most famous types of tokens. These serve a common purpose: increasing fan involvement and generating revenue. ### Gaming Gaming applications and e-sport teams use fan tokens to enhance community engagement. For example, some of the big names Socios has partnered with are Team Alliance and Team Heretics, among many others. ### Football More than 19 Football clubs have already made their respective fan tokens. Examples include PSG, AC Millan, Manchester City, and FC Barcelona. Football has the most fan tokens associated with it compared to all other sectors involved with such digital assets. ### Fighting Fan tokens increase fan participation in chats and polls in professional MMA organizations. For example, UFC and PFL have released their own fan tokens. ### Movies The entertainment sector has stepped into the world of digital assets recently. One of the major movie companies ‘Mogul,’ has introduced NFTs and a DeFi platform for the showbiz industry. Additionally, they have announced a plan to introduce fan tokens for this sector as well.
## How to identify a fan token? As a part of a fan club or sports club, people are familiar with the logos and slogans of the clubs. Hence they can easily identify a fan token when they see it. Before buying a fan token, you can check its worth by knowing its market capitalization. The seller of the fan token sells a particular one that the fans identify and buy. These fan tokens serve a different purpose than other cryptos( like Ethereum); they solve financial or tech problems in a more fan-based reward system. ## Benefit to clubs A fan token serves to be a helpful tool for clubs and teams as it helps them generate revenue on a much bigger scale. Now that the effects of Covid have been minimised, the focus of fan tokens has changed. It is directed more towards an enticing and reward-based fan experience rather than revenue generation. Some good examples are fan tokens in both the sports and music industries. One of the most in-demand fan tokens nowadays is the ‘KPOP fan token’ It is a fan token for famous Korean popular music. ## Crypto vs Fan Token Like cryptocurrencies, fan tokens can be sold, bought, and traded. The difference between the two is their value; for example, Ethereum tokens being stablecoins, have a fixed value. Whereas fan tokens have a set selling price at the start, which changes over time. It changes per market movement and how much participation it gets from the token holder. ## How to buy fan tokens
### Where to Buy There are some platforms from where one can buy fan tokens, for example,, Phemex, etc. Initially, a seller sells a fan token for a fixed price at that time, known as ‘FTO’ (fan token offering). After which, the prices rise following the gain in popularity of the token. You can use cryptocurrencies like Chiliz ($CHZ), Tether (USDT) etc, to buy fan tokens. Fans first have to purchase CHZ through a crypto exchange if they wish to purchase a fan token. ### How to Buy These simple steps summarize the process: 1. Buy Chiliz or other acceptable cryptocurrencies from or any other crypto exchange. 2. Select the desired token and specify the number of fan tokens you want to purchase. 3. Receive your tokens after the system verifies your payment. The price change of the tokens varies with popularity, wins, and losses. Tokens may rise in value if the team is considered a champion, while if the team does not perform well, its token value may fall. The more fan tokens one has, the greater will be the access and right to vote on a variety of matters surrounding their favorite team. ## Five Fan Token Projects You Should Know
### 1. Santos FC Fan Token SANTOS
What Is Big Eyes Coin? Here's All You Need To Know
Amid a prolonged crypto winter, not too many projects have been brave enough to give a try at a major launch. But as a new year approaches, many are looking to turn the page. One investment theme that could hold up in 2023 are community-driven tokens, following in the footsteps of successful projects such as Dogecoin (DOGE) and Shiba Inu (SHIB). One particular project that’s created a lot of chatter and the “next big player” in the cryptocurrency industry is Big Eyes Coin (BIG). As the meme token gears up for a much-anticipated launch, let’s find out what sets Big Eyes apart from others. ## What Are Meme Coins? The first decentralized cryptocurrency to ever be created was Bitcoin (BTC) and soon after Ether (ETH) hit the market, marking the beginnings of a new economy based on blockchain technology. However, this also gave rise to a new phenomenon: meme tokens. Simply put, meme coins are digital currencies inspired by jokes, memes and internet parody. Despite generally lacking utility, meme coins have seen an explosion in popularity, initially led by Dogecoin (DOGE). Dozens of meme coins have sprung in the last few years, sometimes even based on parodies or parodies, although it might not always be clear what exactly makes these tokens so buzzworthy. That said, they’re still a considerable part of the crypto market, rallying big communities behind it.
Top 10 Metaverse Crypto Projects To Watch In 2023
We’re living through transformative times, which can feel both exciting and hard to keep up with. All that talk of Web 3.0, cryptocurrencies and the metaverse, but most of us are still left scratching our heads when trying to understand what it actually means. The good news is that while the technology might be a new concept, there are plenty of great projects already taking off and creating opportunities that could change your life in a profound way. In particular, the metaverse and crypto are coming together to shape the future of digital frontiers in areas like gaming, work, entertainment, education, shopping and much more. With so much going on, it’s perhaps worth getting to know what’s this all about and which metaverse projects to keep a close eye on in 2023.
Best Blockchain Movies To Binge-Watch Right Now
Blockchain this, blockchain that. Blockchain everywhere. But where is the guide to understanding blockchain, and more importantly, how can you finally get to know what all those crypto memes really mean? Because, honestly, blockchain sounds just like a hard subject to learn would. But worry not, we've got the solution for you. If you love films, learning new things and you're interested in blockchain (and cryptocurrencies), you might become an expert in no time thanks to the list of movies we've put together. Meet the main Blockchain players, learn the most important concepts and find yourself asking some serious questions while having fun along the way. Whether you're totally unfamiliar with the technology or you're already a crypto enthusiast, there's something new for everyone in these documentaries. So let's jump right into the binge-worthy titles...
What are Non-Fungible Tokens (NFT)? Start Guide 2023
Non-fungible tokens (NFTs) were undeniably one of the most discussed topics in the blockchain industry. So, what exactly are these NFTs? Why are they so important?
Best Play-To-Earn Games To Try In 2023
Play-To-Earn gaming is all the rage now. Unlike traditional gaming, P2E brings real money and rewards into play, marking a departure from the business model that dominated the gaming industry for decades. From Splinterlands to Axie Infinity, players are rushing to games that can fulfill their entertainment needs while providing clear monetization paths in return for the time and effort they’ve put in. Last week, we put together a quick intro to Play to Earn, but here’s a recap icymi: P2E gaming relies on blockchain, meaning that through this technology players are able to buy, sell or exchange in the form of non-fungible tokens (NFTs). This way, not only do they have control over their transactions every step of the way, players are even more crucially able to to retain ownership of the digital assets they’ve collected during the course of their gaming experience within a title. From there, players can choose to take those items outside of the game and exchange them across other marketplaces and trading platforms, in return for digital currencies (cryptocurrencies) or fiat money. In short, in-game items have real world value. There are plenty of monetization opportunities within P2E. A player can, for example, purchase an NFT, upgrade it and then resell it for a higher price. Play to earn games are also highly attractive given the opportunities to get rewarded for activities completed within the game, like quests or duels. The impact of P2E is accelerating profound changes in the gaming industry, with more than half of American and UK-based video game developers now saying they’re starting to implement blockchain technology and the use of NFTs in their titles, according to a recent survey.
How Blockchain Is Changing Gaming
The gaming industry has come a long way. From clunky consoles, quirky cartridges and simplistic games (Super Mario Bros, anyone?) to an entertainment outlet worth over $170 billion, powered by more than 2.7 billion players worldwide. Nowadays, gaming is an all-consuming experience, built on top of ultra-realistic animations, full of twists and turns throughout what seems like an endless stream of entertainment content. There's seemingly nothing out of bounds when it comes to the possibilities of gaming. From personalizing avatars to customizing environments, purchasing tools and setting up tournaments, gamers are showered with all kinds of options to enhance the time spent in virtual worlds. But we've gone beyond the choosing of color palettes and skins; user preferences are changing the foundations of gaming. Instead of the linear experiences of the past, gaming is increasingly an open-ended experience. This is evident by the success of sandbox titles like Minecraft, drawing in players with infinite playable loops that can take shape in the form of challenges and competitions, for example. The more players engage, the greater their status in the community and bigger the incentive to engage with other users. And how to better enhance this experience than by letting players create and exchange (or even sell) their own content. All of this opens the doors to a gaming experience without limits. Take Roblox or Fortnite, two games also seeing a meteoric rise on the back of user-generated content (UGC). However, the majority of gaming experiences remain trapped in traditional, centralized models. This means that developers and gaming companies hold the most power within the ecosystem. Even when users come up with their original content, its value is entirely tied to the gaming dynamics set by developers. That's because games are provided to users on a licensing basis, meaning that they’re free to play and be enjoyed, but in the end users don’t own any in-platform assets. Think of it like renting a house but not being the owner; gamers are simply renting games. Players can be subjected to unexpected or arbitrary decisions that limit their possibilities, from the worth of their creations to the number of units that can be sold or exchanged in a marketplace. Ultimately, centralized gaming models don't favor players - and certainly fail to reward the most loyal ones, despite them spending more time online.
NFT Use Cases: There's More To Them Than Just Art
NFTs are all the rage. But we already know that. By now, many of us will have already come across at least a couple headlines or social media posts that we’ve probably had to scroll back just to read twice. You know, about those stories of virtual paintings, GIFs, cartoons, tweets and pictures of rocks selling for millions and all. But you might still be wondering what exactly makes virtual art worth that kind of mind boggling price tag, especially when, in theory, anything on the internet can be easily copied and shared. That’s because these pieces are actually NFTs, or non-fungible tokens, meaning they’re one-of-kind and can’t be duplicated. NFTs are essentially digital representations of everyday, real-life items, whose authenticity, ownership and transaction records are registered on a blockchain. This technology makes it near impossible for NFT-based digital assets to be copied, edited or hacked. Since all NFTs are: - Unique: there is always only one NFT per digital item - Non-fungible: can’t be traded for other tokens as they don’t have the same value - Scarce: the value of NFTs is tied to how rare they are They enable a new and more efficient way of commercializing digital assets, especially in industries where it’s particularly difficult to establish ownership or determine authenticity, like the luxury fashion segment. NFTs also open brand new revenue streams and have the potential to fuel the rise of innovative digital products. Many industries are already tokenizing assets including sports highlights, music albums, iconic entertainment moments and memorabilia. But as NFT sales continue sparking wider interest, much is being asked about whether they’re just a fad and if they hold any long-term promise.
Crypto Thanksgiving - Yes, You Can Sit At The Table Without Hiding Behind The Turkey
Well, you might be thankful that this time last year you didn’t understand enough of NFTs and cryptocurrencies to make recommendations to your relatives. That or… Thanksgiving dinner is about to get a little awkward. So, if everyone you told to “buy at the top” in 2021 is now at the dinner table staring at you and wanting to know why their portfolio is down a painful lot, fear not. Here are a few explanations that will help you save face this holiday season.
Key DeFi Indicators: 10 Picks To Measure Performance
DeFi is the abbreviation commonly used for “decentralized finance” systems. It is an upcoming technology that works on distributed ledgers just like in cryptocurrencies. Decentralized financing challenges the traditional financial system by giving individuals more control over their transactions. Using decentralized financing can easily avoid service fees that financial entities like banks charge. DeFi is accessible to anyone who has an internet connection. Funds are instantly transferred and can be stored in digital wallets personalized for users. Three main components comprise DeFi systems; hardware, software, and stablecoins. The involvement of a centralized financing institution or a third party is eliminated by decentralized finance. There is no set-out book of rules and regulations that control DeFi. It is a system in continuous development. With the ease of making cheaper and quicker transactions comes a cost to pay, and the customers have to be responsible for the transactions. The risks and benefits must be weighed out before getting into a DeFi project. A best practice for DeFi investments is to look for market indicators that can give an idea about the performance of the DeFi project. There are numerous key performance indicators (KPI) that can give a good recommendation regarding possible investment opportunities in DeFi projects. ## 1. Total Value Locked (TVL) In a decentralized financing project, the total number of DeFi tokens or the money stored as security is referred to as the “total value locked.” The TVL aids in the assessment of market shares of different decentralized finance protocols. The TVL is considered to be the beginning point to assess the worth of a DeFi project. TVL indicates whether the asset is overvalued or undervalued. TVL represents the liquidity of a marketplace that can familiarize you with the interest rates on a wide scope in decentralized finance. A DeFi Investor can pinpoint undervalued decentralized finance projects through Total Value Locked. Usually, the total value locked is calculated in US dollars or Ethereum, which itself is a stablecoin. The main advantages of the TVL can be summed up as follows: - TVL represents the liquid money accessible for transactions in all decentralized finance protocols. - TVL controls the gains from decentralized finance applications. - TVL gives an idea to investors about worthy protocols. - If the total value locked for a project is high, this means that it is a valuable project The total value locked holds a high position in the key indicators for a DeFi protocol. Investors are urged not to miss out on considering the TVL before finalizing a project for investing. ## 2. Annual Staking Yield Staking in DeFi refers to the passive income that a DeFi investor can earn by holding a legitimate cryptocurrency in a certain amount. The staked currency has to be stored on a decentralized finance platform. Liquidity pool staking can present profitable opportunities to investors on DeFi platforms. Nodes are used to validate the staked block after the investors enter their DeFi tokens in a staking pool. Node allocation is done randomly by the system. However, the blocks with larger amounts of tokens to be staked will have a greater chance of being selected. An annual yield refers to yearly profits rather than short-term returns. Annual yield is much more reliable than the one obtained from a shorter time period. Viewing the annual performances makes it very simple and easy for a DeFi investor to note undervalued assets. Returns from a DeFi project can differ from project to project. One project might have a favorable return in a month, whereas another protocol might give favorable output after a longer time period. Hence the annual yield will provide a more reliable and clearer picture of the performance of an asset. ## 3. Price-to-sales ratio (P/S ratio) This ratio compares the market capitalization of an asset with its revenue. As DeFi projects also generate revenue, the P/S ratio can be used to evaluate them . The value of a stock is determined using the ratio of its price to its sales. In decentralized financing protocols, the P/S ratio is calculated by dividing the protocol’s capitalization by its total generated revenue. It is believed that an undervalued protocol will have a low p/s ratio, which means that it is a good investment opportunity. Similarly, a protocol with a higher price-to-sales ratio will indicate that it is overvalued. This ratio can be better used for the evaluation of protocols that are in their early stages. These protocols usually have a lower revenue because most of it is reinvested to help the protocol grow. The P/S ratio indicator can prove to help make informed decisions but should not be treated as a DeFinitive measure. ## 4. Token supply on exchanges Tokens are sold and bought on two types of exchanges: centralized and decentralized. The difference between them is that in a decentralized exchange, an intermediary entity is not required to build trust. If the token holders do not store their funds in crypto wallets, a large number of tokens to be sold is available. Sellers become under pressure to sell tokens leading to an unstable token. Keeping an eye out on the token supply in these exchanges. A token with high liquidity can present a good front for investment. It is often observed that DeFi whales flush the market with a huge amount of tokens. This sudden increase in the token supply gives an immediate boost to the popularity of that asset. This increase in popularity also increases the overall demand for the token. Although token supply on exchanges is a very useful indicator, it is better to look for other key indicators that can help the investor in DeFi trading and earn money. Every DeFi investor must conduct thorough research on multiple factors before finalizing a platform for investment. ## 5. Token balance changes on exchanges Keeping an eye out for token supply may be an important tactic to understand the DeFi market and invest wisely. However, the significant and recent alterations in the token balance of a DeFi exchange platform should also be monitored. Token volatility can be observed by keeping a check on the balance of the token in exchange. A probable increase or downfall in the demand and popularity of a token can be indicated by the changes in the token balance. It is often an indication for investors that DeFi whales are storing tokens when massive withdrawals are observed in centralized exchanges. Similarly, large deposits could suggest that the DeFi giants are trying to get rid of certain tokens. ## 6. Inflation Rate The above mentioned key indicators suggested that a smaller DeFi token supply may be a positive sign for investors. This is not always the case, if most DeFi protocols show a small token supply for now, there is no guarantee that it will remain the same. A high inflation rate devalues a decentralized finance token. The DeFi protocols, which have specific rules to prevent inflation, are usually considered a good fit for investing. However, there are protocols that either do not have any mechanism for inflation control or the rules are not so efficient. This makes the supply of tokens difficult to manage. As mentioned earlier, the supply rate of a DeFi token is one of the key performance indicators (KPI). It is always recommendable to research the supply rate as well as the inflation rate of the tokens. If high inflation is evident from a token in the past, avoiding it can be a perfect decision. The DeFi markets are of very unpredictable nature and extremely volatile. Thorough research always proves to be vital to generate revenue from an investment. ## 7. Unique addresses growth rate The unique address growth rate indicates the popularity of a project in the DeFi market. A DeFi project is said to be popular, given the increase in the number of unique addresses. Bear in mind that this indicator is very easily manipulated, and decisions based on it can lead to losses. Unique addresses refer to the individual crypto wallets associated with DeFi. Positive growth of an address in DeFi protocol will indicate that the investors are generating revenue. It is very easy and simple to create addresses quickly. If some people decide to generate many addresses and a hoax of popularity, naive investors can easily get entrapped. Therefore, to avoid such mishaps, it is better to not solely rely on this indicator and make a decision by the country verifying your findings from all available DeFi indicators. ## 8. Documentation Completeness One major disadvantage of decentralized finance being an unregulated platform is that many protocols are either launched with incomplete documentation, or the documentation is done very poorly. A huge number of new gullible investors have fallen into these traps. This has led to people losing their hard-earned money to such projects.
Some details that must be checked before signing up for a project are: what will be the course of action in case of a security breach? Who will be liable to compensate for any funds lost? Do the platform users vote for compensation to be provided? These kinds of details are often looked over by new investors, which leads them into such pitfalls that they are often unable to recover from. A project’s website announcements and whitepaper must be reviewed thoroughly before investing. ## 9. Non-speculative usage An investor mostly has two concerts regarding a protocol. One, what are the risks involved with this investment, and second whether he will get a decent profit on the investment or not. High risk means that investments will be lost, and the return on those investments will be negative. Many assets often promise very good returns, but after investing in them, they don't deliver those promises. So knowing why one should invest in an asset and where it is used is very important to determine the real worth of an asset. The customer is urged to look for projects that have legitimate uses. The transactions in a protocol performed for speculative use should alert the investor to be careful in investing in this protocol. The number of transactions carried out for an asset can provide information about the real worth of that asset. The investor can know about the usage of a potential asset by reviewing its number of transactions. ## 10. Social Community Size Social media has made it easy for everyone to connect, inquire about something, and even keep looking for DeFi projects. Social media platforms can provide a good idea about the trends in the popularity of an asset. Keywords play a vital role in determining these trends, the keyword of the kind “how to invest in J tokens.” And “what is a J token“indicates an increase in the demand for a token. If some known influencers start mentioning a certain asset on social media, their viewers tend to react to that asset positively. This pushes the popularity and demand for that asset beyond limits. One recent example of such an increase in popularity was seen with DogeCoin. The demand and popularity of DogeCoin skyrocketed after some notable individuals wrote about the coin. To sum up, we could say that if most of the social community is discussing a certain project, the project will likely grow exponentially. ## Closing thoughts DeFi markets present a very attractive front for investments. It is up to the investor to identify and pick an asset that shows promise in the future. Sole responsibility comes on the shoulders of investors. One can predict an asset's potential by studying certain DeFi indicators' characteristics. These key indicators guide one in the right direction as to where one should put his investments. On one hand, the DeFi system's unregulated nature has benefits like not being dependent on any mediary entity. On the other hand, it also directly puts all responsibility on the investor. Proper research about the asset will ensure a certain level of return from the investment.
What Is DeFi: Decentralized Finance Explained
Many of us share a common pain: our banks are stuck in the past and offer minimal interest rates while charging high fees for even the smallest transactions. And with so many aspects of our life depending on banking, finding better alternatives can be a strategy that not only saves you money but also makes money. This is where decentralized finance enters the conversation. DeFi is upending traditional finance and becoming a viable alternative to centralized financial institutions by providing all the products and services you already use and helping you perform financial transactions without the need for an intermediary. But how is this possible? We have all the answers you need in today’s guide to decentralized finance, including how Defi works as well as the advantages and risks of using this emerging technology. ## What is Decentralized Finance? Decentralized finance - or DeFi for short - refers to financial products and services that rely on cryptocurrency and blockchain technology to conduct transactions such as payments, loans and transfers. One of the main goals of DeFi is to democratize finance away from, you’ve guessed it, centralized institutions like banks, governments and regulators. Other benefits of using a decentralized platform include reduced transaction times and easier access to financial services to pretty much anyone with, well, internet connection. Before we get into the nitty-gritty, two more aspects that will help you get a quicker understanding of DeFi: finance takes place in a peer-to-peer format (so no third parties involved), and DeFi applications are resistant to centralized control and even censorship. We’ll be getting back to this in just a moment.
What Are Flash Loans? Leveraging DeFi In New Ways
If you have ever taken a loan from your local bank, then you must be familiar with the tediousness of the process. You have to render a bunch of documents, proof that you have the means to pay back, and fill out extensive forms. Let's not forget the dreadful wait for the approval. In some cases, you might be asked to drop a valuable item as assurance that you'll return the money. Blockchain technology and DeFi platforms have introduced this new thing called flash loans that allows borrowers to take loans in an instant without having to endure the hassles and tardiness of traditional banks. In this article, we'll be taking a deep dive into the concept of flash loans: what they are, how they work, and where you can get them. ## What Are Flash Loans in DeFi? A Flash loan is a collateral-free loan automatically issued by DeFi protocols using smart contracts. Applicants receive flash loans in an instant (hence the word 'flash'), making them highly appealing to quick-loan seekers. But get this, the borrower has a very small time window to return all the funds—something between seconds to a couple of minutes Flash loans and traditional loans have the same core concept. Whenever a lender offers a borrower money, they expect the borrower to eventually return the cash in full at some point in the future. Before the lender releases the funds, both parties agree on the terms of the loan like the maturity date and interest rate. However, there's a marked difference between the two in terms of the methods used to issue them. Unlike bank loans which operate in a centralized system, a flash loan is purely decentralized, and that's what makes them so attractive. With regular loans, the bank micromanages the issuance of loans using human personnel, who thoroughly review new applications before releasing loans to customers deemed fit. Even if the borrower has all the qualifications, they still have to wait for quite a while before the banks approves On the other hand, a flash loan is issued by DeFi protocols which are basically software designed with computer code that can automate contracts. There's no staff reviewing every single loan request. All DeFi platforms do is provide infrastructure for the lender and borrower to meet and make secure transactions. In short, they mostly serve as intermediaries between the two parties. This model breaks a lot of barriers borrowers face in the process of securing loans. ## Benefits of Using Flash Loans Flash loans are patronized by millions of crypto users due to their several benefits. ### Instantaneous Transactions People who can't stand the delay and bureaucracy involved with securing bank loans embrace flash loans without a moment's thought. Besides the dreadful requirements to qualify for regular loans, applicants still have to wait long periods for approval. The automation of smart contracts enables funds to change hands quickly in flash loans. Borrowers receive loans immediately and the flash loan lender also gets their money back in a matter of minutes. Since the borrower only has the grace of a few minutes, they have to act quickly to put the borrowed funds to good use within those brief moments. Traders often take a flash loan to leverage positions and get in and out of trades quickly using smart contracts. ### Smart Contracts Smart contracts are codes that do not complete blockchain transactions unless the people involved fulfill certain conditions. They make all sorts of financial applications of blockchain technology possible, including DeFi platforms and flash loans. In flash loans, they are skillfully employed to ensure that lenders always get their funds back in full. A flash loan transaction is only complete after the borrower returns the funds. If not, the smart contract reverts the funds to the lender like it never happened. In doing so, flash loans offer uncollateralized debts with the safety of secure loans in the same breath. ### Unsecured Loan An unsecured loan is a debt taken without collateral and flash loans fall under the category. Although unsecured loans signal risk to lenders in traditional markets, they have become the golden goose of loan-taking in the crypto world. Lenders usually prefer to give secure loans (debts with collateral) so they have something to hold on to in case the borrower ghosts. With flash loans, the lender doesn't have to worry about a vanishing debtor because smart contracts automatically return their funds immediately after the duration for the loan expires. Now that you know why flash loans are amazing, let's have a stab at what goes on under the hood in a complete flash loan transaction. ## How Do Flash Loans Work? Smart contracts are central to flash loan transactions. Without them, flash loans won't have speed, reactivity, and precision. They are responsible for: - Moving funds between the two main transacting entities (the lender and the borrower) and interacting with the flash loan provider - Helping the borrower use the loan to make quick moves on exchanges to yield profits - Returning assets to the lender if the borrower refuses to repay or something goes wrong A borrower needs smart contracts capable of executing three vital functions to interact with the lending platform. Here's a high-level explanation of each function: The first function collects the loan from the flash loan provider. Some of the most popular lending platforms are Aave, UniSwap, and dYdX. The second fires transactions on a crypto exchange based on logic provided by the borrower. If that results in a profit, one more function returns the borrowed amount plus interests to the lender. ### Workflow From the perspective of a user trying to get a flash loans from Aave lending protocol, here's how it's going to unfold play-by-play: - The borrower takes a flash loan out of Aave - Configures a smart contract to place potentially profitable orders on a crypto exchange platform - Takes profits from the trade - Pays back the loaned capital plus transaction charges and keeps the profit margin. As of writing, Aave taxes borrowers 0.09% Say something goes wrong like the trade ends up in a loss or the borrower just doesn't return the funds, the lending platform detects any inconsistencies and reverses the transaction. A timed smart contract developed by the flash loan providers does a balance check on all transacting entities. If they find that the borrower returned less than the due principal plus agreed interests, the smart contract reverses the entire transaction. In effect, the lender's balance returns to its original state before the flash loan was initiated. From the above demonstration, It's easy to confer that flash loans are trustless, low-risk instruments with benefits for both borrowers and lenders. It is a financial tool that offers traders better leverage and rewards lenders for providing market Liquidity.
What is a Blockchain Bridge?
Blockchain technology has made countless technological advancements since its white paper emergence in 2008. Since then, numerous blockchain networks have been created with various designs and intended functionalities. The decentralized promise ensures that blockchain will be owned or operated by numerous stakeholders as opposed to a corporate and centralized model of governance. Such ownership and operational structure have been major contributors to the success of blockchain technology. However, the continuous developments of blockchain networks have resulted in one network being practically cut off from another. Such an isolated nature goes against the fundamental principles of decentralization. This limits decentralized interactions and creates economic growth, trade, and innovation hurdles. Several blockchain projects have begun to address the problem by building blockchain bridges between the networks. Blockchain bridges enable interoperability and allow the exchange and use of information to build on each other’s networks. Advancements in blockchain bridges can lead to several benefits for the DeFi industry, including increased liquidity and the ability to develop an interconnected network of services. ## What is A Blockchain Bridge? Simply put, a blockchain bridge, sometimes referred to as a cross-chain bridge, connects one blockchain technology with another. It allows the transfer of tokens or data between blockchain technologies. Although both blockchain platforms have different ownership and governance structures, blockchain bridges allow them to work securely in conjunction with each other. So, for example, if you have bitcoin and would like to swap it for Ethereum, you can do that using a blockchain bridge. Despite their capabilities of integrating two blockchain softwares, a bridge is an independent entity and is not owned by any individual blockchain. One of the major benefits of these bridges is that they increase the interoperability of blockchain technologies by enabling them to exchange and use information. Like all other technologies, blockchain bridges come with a few risks such as, risk of theft and exploitable vulnerabilities in digital contracts.
5 Best Crypto Robo-Advisors You Need To Know In 2022
If there’s one thing we’re learning in 2022 is that the crypto market is still young and facing intense volatility. And yes, I know, trying to to understand how cryptocurrencies work can be complicated and time-consuming at best. It doesn’t help either that the language can sound like over the top jargon most of the time. But don’t let that deter you. Whether you’re a newcomer or someone who finally wants to crack the mystical market cryptocurrencies, perhaps it’s time to consider turning to a robo-advisor and automate your digital asset investments. That way you won’t have to spend hours researching and tracking the crypto market, and you’ll be able to invest in the cryptocurrency market with minimal effort. But what are robo-advisors, and what do they do? Here’s an overview that can help you decide whether a robo-advisor might be a good fit for your goals and the top platforms that you should be looking at in 2022. ## What Is A Robo-Advisor Simply put, a robo-advisor is an automated investment service that relies on computer algorithms and complex software to manage financial portfolios. Since being developed over a decade ago, these types of automated advisors have become increasingly popular, in particular with novice investors. That isn’t to say that more experienced investors can’t reap the benefits of using this service as well. Robo-advisors are a great option for those of us who don’t have the time to keep up with the markets or simply don’t want the anxiety of managing our own portfolios. There are many benefits in choosing an automated advisor over a traditional financial advisor. Let’s look at how this all works. When you sign up for a robo-advisor, you’ll be asked to complete a questionnaire to assess your personal preferences such as your financial goals, time horizon, and risk tolerance. Based on this data, robo-advisors weigh your personal preferences against unpredictable market forces, like volatility and asset class performance, to recommend the diversified portfolio strategy that better meets your needs. From here, you can set it and forget it, so that your funds will be managed and rebalanced automatically by your robot advisor. Choosing a robot advisor can be a good move to invest in the stock market with minimal effort and peace of mind. They’re also typically cheaper than traditional advisors as they charge less fees, including the minimum initial deposit. ## What Is a Crypto Robo-Advisor A crypto robo-advisor is an online platform that will manage your crypto investments automatically. Instead of a human financial advisor, advice specializing in cryptocurrencies and non-fungible tokens (NFTs) is being generated by algorithms so that your financial goals are reached while you get the peace of mind that comes from knowing your digital assets work hard for you. Just like with the robo advisor strategy we described earlier, a crypto robo-advisor takes an algorithm-driven approach to assess a user’s preferences, risks, and goals, and creates a crypto investment portfolio in accordance with that information. Automated crypto advisors will also provide services such as portfolio rebalancing and tax-strategy products, depending on where you live, as well as having recommendations on which digital assets you might want to buy, hold, or sell. The crypto market can be especially daunting for newcomers, so choosing a crypto advisor that will manage your portfolio automatically and that lets you track your investments without the time and effort that it takes to do it all by yourself, can be a great advantage. ## How Do Crypto Robo-Advisors Work Based on advanced algorithms and automation, robo advisors are an investment platform that is both convenient and affordable. Here’s how a typical automated advisor works: ### Create an account and deposit money The first step in setting up a crypto robo portfolio is opening an account and depositing a cryptocurrency. The minimum amount required to open investment accounts will vary depending on the platform you’ve chosen. ### Assess your investor profile Once you’ve opened your account, you’ll likely be asked to complete a questionnaire so that the crypto robo-advisor is able to establish your investing profile based on parameters such as financial objectives, timeframe and risk preferences. ### Your robo-advisor creates a crypto portfolio Based on your preferences, your robo-advisor will allocate you to a suitable basket of investments, made up of different digital assets. ### Enjoy your portfolio being automatically managed Once your portfolio is set, the robo-advisor takes care of the rest, periodically rebalancing and optimizing your investments using different algorithms. ### Withdraw money whenever you choose This may depend on the robo-advisor you’ve chosen, but most platforms will let you access and withdraw funds at any time. This flexibility is certainly a major plus when compared to other platforms in traditional finance. ## 5 Best Crypto Robo-Advisors In 2022
### Betterment
What are Investment DAOs: Exploring This Crypto Financing Model
DAOs are forecasted to grow rapidly within the next decade, changing the narrative of what constitutes a sound investment vehicle. Industry experts predict that DAO assets will expand to one trillion dollars by 2032. Mainstream investment is moving away from the traditional model to a decentralized one that is accessible to all, thanks to blockchain technology. Investment DAOs allow token holders to vote on proposals and decide where capital will be invested through a community-based approach. Let's look at the definition of a DAO, how investment DAOs work, and their benefits, risks, and legality. Finally, how do investment DAOs compare to traditional venture capital? Could it be the end of traditional VC as we know it? ## What Is a DAO? A Decentralized Autonomous Organization, known as a DAO, is an online community run on code and controlled by token holders instead of a single authority. DAOs are used for many purposes, such as buying NFTs, investment, charity, and more. A DAO is governed by smart contracts, an automated computer-generated program stored on a blockchain that runs when predetermined conditions are met. Smart contracts allow the process to be a democratic and decentralized system, providing full ownership of decision-making to its members. DAO members make decisions through proposals and votes that are then executed using smart contracts. All information can be publicly audited, including proposals, voting, and the code itself. A DAO can run without the need for any human maintenance due to these smart contracts.
What Are Generative Art NFTs?
Shelling out millions for a piece of art is nothing new, but doing it for digital paintings, memes and GIFs is a whole other story. These days, collectors are willing to part ways with some really big bucks to snatch top NFTs and cash in on the craze that’s taken over the digital art market. And while you might have heard about it all, what you might not know is who exactly is behind this art. Or rather, what is. See, until now NFTs have been the product of human creativity being given a helping hand by technology. Browsing through the world’s largest NFT marketplaces like Nifty Gateway or OpenSea, you’re more likely than not to find art made by humans. And those are the tokens selling for top dollar. But the dark horse of NFTs might be something else altogether. Get ready because your next favorite artist might be AI - and it’s something you're unlikely to have ever come across before. Art made entirely by artificial intelligence has been touted as the ‘next big thing’ and that's gotten collectors are buying in. A collection of NFTs created by a robot artist named Botto sold for over $1.1m last year and projects like the AI Art House feature generative art NFTs that so closely resembles the likes of Monet, Mondrian and van Gogh you’d be forgiven to think they’re long lost art pieces by past art geniuses. But in the end, AI-generated art is able to produce one-of-a-kind pieces that push the limits of exploration and creativity beyond human touch.
What Are Decentralized Exchanges: The Essential Guide to DEXs
The rise in interest for cryptocurrencies has brought many new users to this market. As a result, there are now hundreds of crypto exchanges that connect buyers and sellers of digital assets. In many ways, these platforms work like the stock market but there are many important differences to keep in mind, especially when choosing between centralized and decentralized exchanges. Recently, we wrote about the best steps to follow when choosing a crypto exchange, and today we will be diving deeper into the inner workings of decentralized exchanges. ## What Is A Cryptocurrency Exchange? Simply put, a cryptocurrency exchange is a platform where users can trade their digital assets, including cryptocurrencies, and exchange them for conventional fiat money (or other digital tokens). Normally, these exchanges act as the intermediary between buyers and sellers. But that is not always the case, as there are platforms run in a decentralized format - decentralized exchanges. The best cryptocurrency exchanges are those that will let you easily buy and sell crypto while charging low fees and offering strong security features. ## DeFi: The Foundation of Decentralized Exchanges Before understanding how a decentralized exchange (DEX) works, it’s important to understand the idea behind decentralized finance. DeFi is a type of financial technology that enables transactions via smart contracts, thus cutting the need for a middleman or centralized institution like a traditional bank or payment services platform. This way, users can access cheaper, quicker and more efficient financial tools. Decentralized finance holds the promise of disrupting the traditional finance system under the argument that centralized systems hold an unfair monopoly over users, letting them have little control over their financial assets.
What Are Wrapped Tokens
There are times when you wish your crypto could work on an unsupported network. Wrapped tokens build bridges across different blockchains to improve the quality of every crypto user's experience. ## What Is a Wrapped Token? Wrapped tokens are custom versions of native crypto tokens built to be transferable on foreign blockchains. Any token that can exist on a blockchain it doesn't originally belong to is classified as a wrapped token. Wrapped tokens were created out of the need for cross-chain transactions or interoperability. All that technical jargon in simple words means the ability of any two given blockchains to interact with each other. But why wrapped tokens? Well, for one, it makes sending tokens to a different network a whole lot easier. If you didn't know, coins living on a particular blockchain are bound by a logic called token standards, which determines how they are minted, stored, and circulated on the network. In short, you can't send, receive or swap tokens on different networks. For example, tokens on Ethereum (e.g ETH) cannot be directly swapped for Bitcoin (BTC), and vice versa, since they exist on two separate networks. However, taking a portion of bitcoin from its home blockchain, and wrapping it with the standard of the Ethereum blockchain (ERC-20), creates a new cryptocurrency called wrapped bitcoin (wBTC). The such token is readily exchangeable for any Ethereum-based crypto. The wrapped version of bitcoin (wrapped BTC) is currently the most common wrapped token in the cryptocurrency world. Wrapped tokens also offer cross-chain liquidity solutions to decentralized applications. As the biggest home to decentralized finance, the Ethereum blockchain is the most fattened with wBTC. Did you know that more than 5.5 million dollars equivalent amount of BTC lives on Ethereum decentralized platforms? The adoption of wrapped bitcoin (wBTC) on the Ethereum network took off in the first quarter of 2022, as bitcoin owners found them extremely convenient for storing their bitcoin on Ethereum wallets and interacting with ETH decentralized exchanges. That way, this technique of wrapping tokens makes it possible for tokens to be transferred across multiple chains without the underlying blockchains communicating with each other. If the concept of wrapped tokens still seems a little fuzzy, don't worry, in the next section we'll explain how wrapped tokens are created, who issues them, and their general working principle. ## How Do Wrapped Tokens Work? Three parties are usually involved in the minting process of wrapped tokens: the investor, the merchant, and the custodian. Typically, the investor and merchant meet on centralized and decentralized exchanges. The user requests wrapped tokens from third-party merchants like AirSwap, CoinList, and AAVE, and sends over their crypto tokens. On behalf of the user, the merchant passes the tokens to a custodian which is a digital vault that holds both regular and wrapped tokens. Custodians have smart contracts programmed to automatically mint a tokenized form of the original tokens received in an equivalent value, and send them to the merchant. After it reaches the merchant's end, the user collects the wrapped token, confirms the transaction, and it's a wrap. Usually, exchanging regular tokens for wrapped tokens doesn't attract gas fees. It's the same process for converting wrapped crypto assets to the original token, only in reverse. You can think of wrapped tokens as IOUs and the tokens deposited on the custodian as collateral. Users can redeem their original assets with wrapped crypto tokens by transferring them to the custodian holding their original crypto through the merchant once again. The custodian burns the wrapped tokens received and sends the exact amount of the original asset back to the user. The custodian's treasury must have a reserve that is larger than the number of wrapped tokens issued at any given time. Otherwise, they will not return a user's original tokens whenever the wrapped versions are presented. There is a technical standard for ensuring transparency between all parties involved in a token wrap process, especially on the custodian's side called proof of reserve. Proof of reserve is a trustless, automated system that verifies if the custodian holds the number of wrapped tokens issued. Tax deductions may apply for exchanging wrapped tokens for the original version. ## Pros and Cons of Wrapped Tokens The utility of wrapped tokens in decentralized finance (DeFi) is virtually undeniable but that doesn't mean we should ignore some of its risks. Check out the pros and cons list to see if it's worth giving a shot. ## Benefits of using Wrapped Tokens
### Lower fees Using the Ethereum network can be quite expensive. In periods of peak traffic, network congestion leads to ultra-high gas fees. With wrapped ether (wETH), Ethereum holders can use ETH and other tokens on Ethereum to perform transactions on other blockchains with affordable transaction fees. ### Faster Transaction Speed Moving tokens across different blockchains can take considerable time and effort. Working with multiple blockchains may require the user to perform more than one transaction before they can achieve a single objective. Wrapping allows a native token on one network to be readily available on another. That way, cryptocurrencies can be simply transferred within the same blockchain. ### Capital efficiency Lending decentralized finance (DeFi) platforms with sophisticated borrowing systems need access to all blockchains to foster a vast settlement scheme. ## Risks of using Wrapped Tokens Market contagion is one of the most fatal risks of wrapped crypto tokens. Market contagion is any situation whereby the sudden loss in value of a crypto asset or protocol affects another one like a chain reaction. In the event of a digital vault failing, any platform utilizing its wrapped assets will suffer some kind of liquidity crisis. In times like this, the reduced barrier and closely knit relationship between separate networks encouraged by wrapping become more of a disadvantage. ### Trust Issues Another major issue with wrapped tokens is the dependency on the custodian. The custodian may not be completely honest about the size of their original asset reserves. Issuing tokens or giving the underlying asset to another user without any real backing leaves holders of the tokenized version with no value. ### Centralized There are more worries about the trustworthiness of the platforms issuing wrapped assets in exchange for primary coins. The Ethereum wunderkind, Vitalik Buterin, aired his concerns about the risks posed by the centralized control of custodians over wrapped crypto assets. Citing more fears in the same direction, Vitalik pointed out the dangers of some of the tokens offered in exchange for wrapped versions being non-Turing complete. Such tokens cannot automatically execute the minting process and transfer of tokens in a trustless fashion via an Ethereum network smart contract and resolve to the centrally-enabled methods. ## Pegged vs Wrapped Tokens: What’s the Difference? A pegged token is any crypto coin linked to and backed by a physical asset (fiat currency, gold, and other precious materials) or other cryptocurrencies in a 1:1 price ratio. When you think of it, that practically describes how wrapped tokens work, so one can say they are both in the same class. Although it is important to make it clear that stablecoins and wrapped tokens are two different assets. While stablecoins are digital assets fixed to the price of fiat currencies, a wrapped token is pegged to another cryptocurrency locked in a virtual vault. Also, stablecoins are not backed with the same exactitude as the more modern wrapped cryptos. Tether (USDT), for example, is only approximately backed to one physical USD. USDT's reserves also consist of a mix of assets and financial instruments: cash, bonds, treasuries, e.t.c. On the other hand, one wrapped token has an exact value to its original equivalent. ## Types of Wrapped Tokens Wrapped tokens are commonly classified by how they are issued and redeemed for their original counterpart. They can be categorized as cash-settled or redeemable. Cash-settled wrapped coins cannot be redeemed for their original crypto assets. Whereas, redeemable wrapped tokens (as you may have guessed) can be exchanged for unwrapped versions of equivalent amounts. ## What Are Wrapped Bitcoin tokens? A wrapped Bitcoin is an ERC-20 token designed to represent the value of an original Bitcoin on the Ethereum blockchain. However, Ethereum isn't the one blockchain that entertains wrapped bitcoin, other blockchains like TRON also have wrapped Bitcoin. Wrapped Bitcoin was invented so BTC owners can use their holdings to interact with DeFi platforms outside the Bitcoin blockchain. The boom of DeFi applications mounted atop the Ethereum blockchain fueled the demand for ERC-20 tokens in 2020. Being the cryptocurrency with more than half the total market cap in the cryptocurrency industry, the wBTC ERC-20 token came to play in an effort for developers to devise a means for bitcoin holders to participate in the DeFi activities on the Ethereum without forfeiting their Bitcoin holdings. ## Conclusion Wrapped tokens are new technologies that are pushing the upper limit of cryptocurrency proliferation. Now it doesn't matter what tokens you hold, you can leverage their wrapped version to interact with supported DeFis and make smooth transactions from anywhere.
What Are Meme Coins? And Are They Worth Investing In?
Cryptocurrencies are digital or virtual coins that use cryptography to secure or validate transactions. Cryptocurrencies are bought, sold and traded on decentralized exchanges (DeFi exchanges) as well as being used to purchase goods and services. Meme coins are a type of cryptocurrency that are created to commemorate or parody well-known memes. For example, the Dogecoin cryptocurrency was created in 2013 in honor of the Doge meme. Meme coins are often traded on decentralized exchanges and can also sometimes be used to purchase goods and services. They have grown in popularity in recent years for a number of reasons. ## What Is a Meme Coin? The first step to understanding whether meme coins are worth investing in, is to answer the question, "what are meme coins?" A meme coin is a type of altcoin that is created through a process of crowdfunding or minting by its users. Meme coins are often created as a joke or to parody other coins or memes, and their value is often based on their novelty rather than their underlying technology or utility. Meme coins are not designed to be used in the same way as utility tokens such as staking coins or using the coins to make purchases. Instead, meme coins are primarily traded on exchanges. There are almost 200 meme coins currently in circulation. You can buy meme coins, sell and trade them much like with any other cryptocurrency. And you can find popular meme coins on platforms like where they can be purchased with cryptocurrency such as Bitcoin or Ethereum. ## Why Are Meme Coins Popular? Meme coins are popular among retail investors because they parody current events. With so many serious things going on in the world, meme coins also offer a means to lighten the mood. But one of the main reasons meme coins tend to be so popular among retail investors is because their value per unit is very low. This makes it easy for people to purchase large volumes of the coins without having to worry about breaking the bank. Some consider meme coins' rise in popularity to be due in part to the pandemic. People spent more time online and memes in themselves grew in popularity, so creating a cryptocurrency coin around this concept was a clever idea. Meme coins' success and popularity are driven by community buzz. As such, buying a certain meme coin can be a way of demonstrating your solidarity or membership of a community. A number of businesses have begun accepting meme coins as payment. Tesla was amongst the first to accept Dogecoin for the purchase of certain items. Nordstrom and GameStop followed suit by accepting meme coins as payment. AMC announced they too will accept meme coins down the line. ## How Did Meme Coins Get Started? Meme coins are coins that are created in response to a particular event or trend. They are often created as a joke, and may not have any real value. Meme coins typically have a very small circulating supply, and may not be listed on any exchange at all. The first meme coin was created in November 2013, when Dogecoin was launched. Dogecoin was created by Billy Markus, who wanted to create a fun cryptocurrency that could reach a broader audience than Bitcoin. Dogecoin became popular on social media sites such as Reddit and 4chan, where users shared images of Doge, a Shiba Inu dog, with humorous captions. As Dogecoin became more popular, its value increased, and it started being listed on several online exchanges. Other meme coins, such as Pepecoin and Potcoin, were created in response to the success of Dogecoin. These coins are intended to be used as a means of exchange, and their values are based on the popularity of the memes that they feature. ## Is It Worth Investing In Meme Coins? Despite their reputation for being highly volatile, meme coins may still be worth investing in for short-term profits. Many of these coins have seen significant price increases in recent months, and it is likely that the trend will continue as long as the coins remain popular. For example, investors could purchase Shiba Inu for $1 in March 2021 with their value skyrocketing to almost $8000 per coin months later. If you'd bought in March and sold later, you could have made an impressive profit. Here's the secret to making money with meme coins. You've got to keep your finger on the pulse and anticipate which memes are on the brink of going viral so you can jump onto new coins as they become available. You can join online forums and groups to keep track of what is going on in the meme coins community to strike when the iron is hot. Yes, it is no secret that meme coins are not a stable investment. But with great risk comes great reward. If you get the timing right, you could be in the running to make some good money. ## Common Characteristics of Meme Coins
### Unlimited Supply: Meme coins often have a very high or even unlimited supply. This means there can be billions of meme coins in circulation with no mechanism in place to remove them from circulation down the line. As a result of this, their value is often low and they're cheap to buy. ### Volatile: Meme coins are notoriously volatile, largely due to them not having a true purpose other than being traded. Their fluctuations can be quite dramatic because of their unlimited supply so there is no way to cap the number of meme coins in circulation. The value of a meme coin can also be heavily influenced by the sentiment of the community around it. If a meme coin goes viral, its value will skyrocket. However, when a new meme coin comes along, it's value can be displaced. They can fall just as quickly as they rise. Some other common characteristics of meme coins are: - They are not designed to be used in the same way as a utility token but rather to be traded - Most meme coins have an unlimited supply - Their value is influenced by community sentiment - Low worth per coin ## Risks of Investing in Meme Coins There are a few risks associated with investing in meme coins, much like with any other investment. ### Volatility: One is that the meme may lose popularity and the coin will lose value. As we mentioned before, meme coins are highly volatile so their value can fall just as quickly as it rises.
### Technology: Another risk is that the developers of the coin may not be reputable or may not be able to continue developing the coin. Meme coins are rarely backed by the same technology as mainstream cryptocurrencies so tend to be more fragile.
### Security: There is also a risk that the coin may be hacked or that there may be a problem with the underlying blockchain technology.
### Scams: There have been incidences of scammers creating viral cryptocurrencies to swindle people out of money. For example, the Squid Game meme coin was selling at over $2000 a coin when suddenly the creators took the coins out of circulation and disappeared with users' money. Yikes!
### Lifecycle: Because their value is based on short-term hype, the likelihood of them retaining any value years down the line is low. They have very short life cycles. Meme coins are best to be viewed as short-term investments to buy and sell while they're still popular. Many people ask whether meme coins are safe? While not every risk can be mitigated, looking out for the following features can help you avoid a scam: 1. Lack of transparency: If the team behind the coin is not transparent about their goals, plans, and how the coin works, it is likely a scam. 2. Fake team members: If the team members are not real, or if they are not who they say they are, it is likely a scam. Developers of a meme coin are often linked to other projects and known within the community. If the team is shady or can't demonstrate their track record of work in the community, it is best to avoid investing. 3. Pump and dump schemes: If the coin is being marketed to investors with the promise of high returns, and then the value of the coin is suddenly dropped, it is likely a scam. 4. No real-world use case: If the coin does not have a real-world use case, it is likely a scam. Keep in mind most meme coins are used primarily for trading and not for staking etc. 5. No blockchain: If the coin is not based on blockchain technology, it is likely a scam. Although there are exceptions to this where DAG technology is concerned. 6. Burn Addresses: It is important to verify whether the liquidity pools are held by burn addresses. This way you protect yourself from investing in a project that disappears with your money. 7. Auditing: Verify whether the project has been audited by a third-party firm. 8. Holdings: As a rule of thumb, no developer should hold more than 5% of the total number of tokens in circulation. If they do, consider this a serious red flag. ## Famous Meme Coins There are a number of meme coins currently in circulation, some more popular than others. ### Shiba Inu
What is Tokenomics?
If you're new to the crypto space you may have heard the term "tokenomics'' and you're probably wondering, "What is tokenomics?" . Tokenomics is the study of digital tokens and their economic behaviors. It encompasses all aspects of a token's life cycle, from its issuance to its eventual destruction. Tokenomics is a relatively new field, but it is already providing valuable insights into the world of crypto tokens. Tokenomics is important because it can help us understand the true value of a crypto token. By understanding the economics behind a token, we can better assess its potential worth. Additionally, by studying the behavior of tokens, we can learn about the overall health of crypto projects. Tokenomics can also help us predict future trends in the world of digital tokens. So far, token economics has been mostly used to study utility tokens, which are tokens that are used to access a specific service or product. However, there are other types of tokens out there, such as security tokens and currency tokens. Security tokens represent ownership in a company or asset, while currency tokens are used as a form of payment. It will be interesting to see how tokenomics evolves as more types of tokens are created in years to come. ## Pillars of Tokenomics There are a number of key pillars to tokenomics, which we will break down below. ### Token Supply Token supply is the total number of tokens that will ever be created. This is similar to the concept of supply and demand characteristics in traditional economics. The higher the demand for a token, the higher the price will be. The total supply of a token can be divided into three categories: circulating supply, total supply, and maximum supply. The circulating supply is the number of tokens that are currently in circulation and can be traded on exchanges. The total supply is the number of tokens that have been created, including those that are not in circulation. The maximum token supply is the number of tokens that can ever be created, which is usually capped at a certain number. The total supply of a token can have a big impact on its price. If there is high demand for a token but only a small total supply, the price will go up. On the other hand, if there is low demand for a token but a large total supply, the price will go down. ### Token Utility Token utility is the key to a successful token economy. A token’s value is derived from its use case and how it can be exchanged for goods and services. The following are five important factors to consider when designing a token’s utility: 1. Frequency of Use. How often will users need to exchange their tokens for something valuable? This determines how often the token will need to be minted or mined. 2. Cost of Acquiring Tokens. How much will it cost to acquire a sufficient number of tokens? This affects the market price of the token. 3. Demand for Tokens. Will there be a demand for the tokens? If not, they may become worthless over time. 4. Supply of Tokens. How many tokens will be created and available for purchase? This affects the price of the token. 5. Interaction with Other Coins/Tokens. How does this token interact with other coins or tokens in the ecosystem? This affects how valuable the token could be in comparison to others in the market. ### Token Distribution Tokenomics is the science of how a token’s distribution affects its value. Tokenomics is important because it dictates how valuable a token will be and how many people will be able to own it. The token’s distribution is also important because it determines who can spend the token and for what purpose. And finally, the token’s distribution affects the overall ecosystem of the project. When designing a token, it is important to consider its distribution. A poorly designed token may have a low circulating supply, which would make the tokens more valuable. Conversely, a well-designed token with a high circulating supply would make them less valuable. The ideal balance depends on the project and its goals. The three primary considerations when distributing a token are: 1) how many tokens will be created; 2) where those tokens will go; and 3) what will happen to unsold tokens. Most projects create a fixed number of tokens and give them away to investors or users in exchange for money or other assets. This approach is called an initial coin offering (ICO). Many ICOs are controversial because they allow people to buy tokens without actually owning them. ## Incentive Mechanisms When it comes to cryptocurrency, one of the most important things to consider is the incentive mechanisms used to reward early adopters, miners and token holders. This is because it’s these mechanisms that will determine how many people continue to hold a particular coin or token in the long run. Some common incentive mechanisms used in cryptocurrencies include: - Redemption rates: How often a given token can be redeemed for fiat currency or other tokens on the platform. - Peg systems: This allows holders of a native token to exchange them for other currencies or assets on a fixed basis. - Rewards for participation: Many platforms offer rewards (usually in the form of coins or tokens) to users who participate in various activities such as voting, commenting, and being a member of an active community. ## Features of Tokenomics There are a number of features that define tokenomics which we will detail below. ### Token burns Burning tokens is a process of getting rid of them from circulation. When a token is burned, it means that one or more tokens are destroyed and no longer have any monetary value. This is done in order to reduce the number of tokens in circulation, and thereby increase the value of each remaining token. ### Token mining Token mining is the process of generating new tokens from an existing blockchain. The process of token mining can be broken down into three main steps: 1. Obtaining the required resources. 2. Generating a new token. 3. Distributing the new token to miners. ### Token staking Token staking is a way of getting rewarded for holding tokens. The more tokens you hold, the greater your reward. This is different from mining, which is how new tokens are created. Supply type: limited vs. unlimited Tokens can either have a limited or unlimited supply. If the supply is limited, then the number of tokens available will be capped at a certain number. Once that number has been reached, no new tokens will be created, and existing tokens will be unusable. If the supply is unlimited, then the number of tokens available will never be capped. This means that the token may become increasingly difficult to obtain over time, as there are more and more people who want to use it. ### Token allocation and vesting Token allocation and vesting are important considerations in any blockchain-based project. The right mix of tokens and their associated mechanics can help to reinforce a project’s legitimacy and encourage widespread adoption. Some projects may issue a fixed number of tokens, with each token representing an equivalent share in the company. This type of model can help to ensure that all token holders are fairly rewarded for their investment. Other projects may issue a greater number of tokens, which allows holders to participate in the project’s growth and rewards them for their support. Vesting periods can also be important, as they should ensure that tokens are available to contributors on a consistent basis. ### Token governance: centralized or decentralized With centralized governance, the authority for issuing new tokens resides with a single entity or group of entities. These entities can be a company or organization, such as a foundation, or a government body, such as the SEC. This type of governance is often seen as more secure because it's less vulnerable to fraud or attack. However, centralized governance is also more difficult to implement because it relies on a single entity to oversee everything. With decentralized governance, the authority for issuing new tokens resides with the users themselves. This means that anyone can create a new token and distribute it among themselves. This type of governance is often seen as more democratic because it's open to all participants. However, decentralized governance is also more difficult to implement because it requires a community of users to co-exist peacefully. If not managed properly, a decentralized network can become chaotic and unruly. ## Tokenomics analysis In the world of cryptocurrency, tokenomics is a critical component that determines the success or failure of a project. Tokenomics analysis is the process of determining the economics and token usage of a project, and it’s an important tool in determining whether or not a cryptocurrency is worth investing in. Tokenomics analysis can help to answer questions such as: -How many tokens will be issued? -How will the tokens be used? -What are the costs associated with holding and using the tokens? -How will the value of tokens change over time? Tokenomics analysis can also help to identify potential problems with a project, such as excessive inflation or token pricing that doesn’t reflect the real value of the network. ### Supply-side Understanding the supply and demand for currency is at the heart of economics and tokenomics is no different. Examining the supply-side of a token helps to understand how many tokens will be created, and how much of the total supply is available for purchase. The scales of economy suggest the less tokens are in circulation, the higher the value of the token will be. When there are too many tokens in circulation, their value will decrease. ### Demand-side The demand for a token is what determines its value in addition to its utility. The more valuable a token is, the more incentive there is for people to hold it and use it in transactions. In order for a token to have value, it needs to be scarce and it needs to have a functional use case. If there are too many tokens in circulation, their value will decline because there is not enough incentive for people to hold them. If there are no functional uses for the token, its value will also decline because no one will want to buy it. ### ROI Tokenomics helps to create a clear financial model for a new token, as well as ensuring that the token is worth investing in. ROI can be calculated by calculating the percentage of return on investment (ROI) over a certain timeframe. This could include a specific number of months, or even years. ### Community Believe it or not, the community that supports a token has a big impact on its value. An active and engaged community who are passionate about the token are key to the success of the token. The community also drives future demand for the token. ### Game Theory Game theory refers to the branch of mathematics and computer science that deals with the mathematical modeling of strategic situations, particularly games where two or more players compete. In general, game theory can be used to analyze any situation where two or more actors are trying to optimize their joint gain. Game theory can help us to understand how individuals will behave in situations where they are faced with competing interests. This can be useful when we want to know how best to allocate resources in order to achieve our objectives, or when we want to know how people will react when they are put into a position where they have to make a decision that affects the whole group. For token developers, game theory can help them analyze the decision-making processes of stakeholders. ## Conclusion We hope we answered the question of "what is tokenomics," but why should you understand crypto tokenomics? Having a good understanding of tokenomics can help you to better evaluate crypto projects and whether to invest in their crypto token or not. These skills can help you analyze the supply and demand for a token, community support and how the project is marketing the token to project its future prospects. For example, if you are considering investing in a token, understanding the crypto tokenomics can help you to understand how much demand there is for that particular token and whether it is worth investing in. If the project doesn’t have good tokenomics, it may not be a good investment, so you can confidently invest and avoid duds.
How To Choose a Crypto Exchange: A Selection Guide
A few years ago, the thought of dabbling in crypto was not for the faint of heart. But fortunately, as blockchain technology keeps maturing, so too have cryptocurrency platforms. That means that trading and investing in digital assets is becoming increasingly easier, even for the uninitiated. As digital assets continue seeing wider adoption, they’ve become an asset class to take note of, especially given the decentralized nature of the underlying blockchain technology, which sets this industry apart from the tightly regulated traditional financial markets. This has given rise to a number of crypto exchanges that aim to help buyers and sellers trade a wide variety of crypto currencies. Amidst this, a recent report by has put an optimist target on the number of expected crypto users at one billion by the end of 2022, further underscoring the vast potential held by these digital assets. However, since crypto remains a relatively new market, finding a reliable and trustworthy exchange is more important than ever. To help you choose the right crypto exchange for you, we’ve put together a short selection guide, with all the nooks and crannies you should be aware of. ## What Is a Crypto Exchange?
What Is a Layer 2 Blockchain?
When it comes to crypto, there’s a lot of new information to learn and digest all the time. This is because crypto and the blockchain aren’t perfect, and in order to become suitable for mass adoption (which is the ultimate goal), this 21st-century technology needs to constantly be upgraded and adapted to the current and future needs of end users. Though there are many benefits of crypto and blockchain, one of the biggest problems that the industry is currently facing has a lot to do with transaction speeds and overall blockchain network scalability. And that’s where the Layer 2 Blockchain technology comes in. While it might sound complicated, this is an umbrella term for various solutions and upgrades built on top of the current blockchain to improve transaction speed and scalability, which the Bitcoin network and the Ethereum network for example are currently facing. With that being said, this isn’t everything about Layer 2 Blockchain. This is an upgrade that could solve a lot of the major issues that were not addressed on the original blockchain. To give you a better and more insightful overview of what Layer 2 Blockchain is, how it works, the scaling solutions it presents, and its benefits, in this article, we’ll talk all about it. Read on to learn more. ## What Are Layer 2 Blockchains? In most basic terms, layer-2 blockchains refer to networks or technologies, which will be operating on top of the original blockchain ecosystem protocol. This is done with the goal of improving the blockchain’s scalability and efficiency issues that were not adequately addressed in the original blockchain. With that being said, while layer 2 blockchains work on top of the original blockchain, they are also completely independent. ## Benefits of Layer 2 Blockchains Layer 2 blockchains are designed to help tackle some of the major issues that cryptocurrency networks face with the underlying protocol of the original blockchain. These issues must be resolved in order to mass adoption to take place, or else, there might be too much friction and delay, which will ultimately defeat the pfurpose of using crypto as a form of payment channels. Since these solutions are built on top of the base blockchain, they still maintain the integrity of the currency, upholding the main principles of crypto such as decentralization and transparency. Below, we have listed some of the key benefits that layer 2 blockchains can offer the community: ### Enhanced Utility To start, layer 2 blockchains will allow for more utility. The reason the potential of crypto is limited at the moment is because of the slow transaction speeds. The blockchain cannot process the number of transactions per second needed for the mass adoption of the cryptocurrencies to take place. To understand this, let’s go back to how crypto works. Every transaction made with cryptocurrencies gets stored on the blockchain, an immutable ledger. It takes a fair amount of work to add blocks or transactions to the chain to ensure immutability and security, but this means that not as many transactions can happen per second. With layer 2 solutions, more people can transact with crypto at the same, allowing for faster processing speed and more utility overall. The ultimate goal of crypto is for everyone to use it as their main form of payment, and layer 2 blockchains might be just what we’ve needed to allow this to happen. ### Lower Transaction Fees Most layer 2 blockchains offload multiple off chain transactions and transfer them as a single block on the main blockchain. This means smaller transaction fees when using the currency as well as less-clogged blockchain networks. And while these layer 2 blockchains will boost transaction speeds, they will still maintain the security and immutability of the original blockchain. It’s a win-win development for everybody. ## How Do Layer 2s Work? Understanding the blockchain alone is hard for a lot of people. And by adding a second layer or a secondary blockchain to the equation, it may seem impossible to figure out how this technology works. But when you break it down, it’s actually quite easy to understand. One of the ways you can look at layer 2s is an extension of the blockchain. Remember, the blockchain exists to process multiple transactions and save them on an immutable ledger. This is what maintains the security of the entire cryptocurrency community and which most crypto coins are built upon. The thing is that the blockchain can only handle a certain amount of transactions at a time. While the blockchain work pretty fast, it still can’t process thousands of transactions every second, which is where layer 2s come in - to resolve this issue. Many layer 2 blockchains work alongside the base blockchain as an extension. What the second layer does is process different transactions and store them in a singular block on the chain. This allows for more transactions to be added to the secure and immutable chain. In the beginning, we didn’t need layer 2 blockchains as not many people used crypto. However, as more people gain interest and use cryptocurrencies each day, the main blockchain needs support, which is what layer 2s are there to offer. ## Layer 2 Blockchain Scaling Solutions There are numerous ways that layer 2s support the main blockchain. Below, we’ll discuss the major layer 2 blockchain scaling solutions that are currently in place to support the blockchain. ### Rollups Rollups are arguably the most popular scaling solution for the blockchain. This type of layer 2 blockchain will process and group different transactions together and add them back to the main chain as a single block. This not only saves time but can also reduce fees, which is another major complaint amongst crypto users. That said, there are two main types of rollups that you need to understand when it comes to layer 2 blockchains. These include: - Optimistic Rollups Optimistic rollups run alongside the main blockchain, transferring different transactions and data blocks to the chain. Many users transact on the optimistic rollups due to the low gas fees and lower transactional burden, allowing them to save money in the process. Anything that’s possible on the original blockchain will be possible on the optimistic rollup. - Zero-knowledge (ZK) Rollups Aside from optimistic rollups, there are also zero knowledge rollups, which use cryptographic proof to validate transactions. These are known as validity proof that confirm different transactions on the chain, ultimately preventing a fraudulent transaction from taking place . While these are efficient, zero knowledge rollups are generally best for apps that don’t have too much on-chain activity. ### Sidechains There are numerous crypto sidechain products out there, designed to run in tandem with the primary chain. These solutions link to the mainnet through bridges. However, these aren’t secured by the base layer, which means they don’t technically qualify as layer 2 blockchains. Additionally, there are certain security risks with this solution that are yet to be properly addressed. For instance, Axie Infinity is built on the Ronin Network — a sidechain of Ethereum. ### Validiums These solutions work similarly to ZK rollups, using validity proofs. However, the difference is that they don’t transfer the transaction data back to the base layer, which means that multiple validiums can run alongside the main blockchain, improving scalability. That said, these are incredibly fast solutions. Many Valdium projects can process up to 10,000 transactions per second, which is way more than the current blockchain. However, there are some issues with Validum solutions that are still in the process of being worked out. For example, these blockchains don’t work well with many smart contracts. This is because there are so many languages and variables that it needs to learn before being able to process the contracts. So, this technology has a lot of potential, but it needs a fair amount of development still. ### Plasma Simply put, plasma chains are a completely separate blockchain anchored to the Ethereum mainnet. So, it can run completely independently but is still connected to the main blockchain or the layer 1 chain. Sometimes, these chains are called “child” chains. This is because they are essentially copies of the main chain but on a slightly smaller scale. These chains function in a similar way to optimistic rollups and use fraud proofs to verify blockchain transactions. ### State Channels Another example of a layer 2 blockchain is a state channel. With these chains, you deposit funds into a smart contract through the main chain before the layer 2 chain produces signed tickets, which can speed up the process of handling smart contracts on the blockchain. This allows for quick and easy off-chain transactions which are then transferred and stored on the main blockchain. ## Conclusion While cryptocurrencies have a ton of potential, we are still in the development phase of this recently-found technology where several fundamental issues are currently being resolved in order for mass adoption to be possible. The biggest issue with the main blockchain is the speed of transactions and scalability. And thanks to layer 2 blockchains, we’ll not only resolve these issues but will also result in lower transaction fees, which have been a huge issue for many crypto users.
What Is a Node in Crypto?
It took a while for cryptocurrency and the technology behind it to become mainstream. But while it’s been years since Satoshi Nakamoto released the first Bitcoin Whitepaper, people from all over are still trying to wrap their heads around cryptocurrencies and how they actually work. Granted, you don’t need to know all the ins and outs and technicalities behind the blockchain to benefit from it but a deep understanding will definitely help you navigate through the intricacies of cryptocurrency much easier. And one common concept and term that’s thrown around in the crypto community is a node. If you know a bit about computer science, then you might have an idea of what a node is. In computer science, a node is simply a smaller component that plays a part in a larger system. And while this is an accurate definition, it gets a bit more complicated when you put things in the context of cryptocurrency. There’s no denying the fact that crypto is complicated. And for a lot of people, trying to understand every little thing about it can be frustrating and seemingly impossible. But we’re here to make things simpler. The best way to fully understand cryptocurrency is to take things slowly, one concept at a time. And in this article, we’re going to be discussing nodes in cryptocurrency. We’ll define what they actually are, who can run blockchain nodes, and why you may want to run one yourself. Read on to learn more. ## What Is a Blockchain Node? Nodes in cryptocurrency are usually associated with the blockchain. So, before getting into what a blockchain node is, we first need to look at the blockchain as a whole. While many people are already familiar with the rough definition of the blockchain, it won’t hurt to go over it again. The blockchain is the backbone on which all cryptocurrencies run. In essence, the blockchain is a ledger that contains all the transactions ever made with cryptocurrencies. This is a digital ledger that is immutable, decentralized, and very secure. Each of the data sets containing each transaction's information is called a “block”. Whenever a person makes a transaction using cryptocurrency, the data of that transaction is stored as a block on a blockchain. To store the information as blocks, the blockchain needs to distribute that information to a series of connected devices. Each of these devices is called a node. All of the nodes associated with the blockchain communicate with each other, transferring transaction information and creating new blocks on the blockchain. The main purpose of a node is to verify each transaction before it’s permanently stored as a block. If the blockchain is the backbone of cryptocurrency, the nodes are the foundation of the blockchain and what allows it to function the way it does. Generally, nodes are classified as full nodes and lightweight nodes. The full nodes are there to secure the network. A full node downloads the entire history of the blockchain, so it can enforce the rules and observe the activity. A lightweight node, on the other hand, doesn't do as much work. A lightweight node must connect to a full node to function properly. Since nodes are essential to the blockchain’s functionality, there are many volunteers that run full nodes to help support the ecosystem. That said, there are two other sub-types of nodes that you may want to familiarize yourself with before trying to run one yourself. These are listening nodes (also known as supernodes) and miner nodes. A listening node is a public full node. These are the public nodes that volunteers run to support the Bitcoin and crypto ecosystem. These nodes will communicate with any other node that establishes a connection with it, verifying transactions and maintaining the security of the blockchain. At this point, many people understand what Bitcoin mining is. Basically, this is when people use their computers to verify Bitcoin transactions to generate a new block. In return for verifying the transactions, miners are awarded a certain amount of Bitcoin. Miners are also nodes as they are a smaller part of the larger blockchain system. Miner nodes can be solo nodes, in which the miner uses their own device to run the node. However, there are also many mining pools wherein many people share their computing power to help mine Bitcoin and verify transactions. That said, keep in mind that nodes and miners are completely different. One can run a node without mining. However, you can’t start mining unless you start running a blockchain node yourself. Miners and nodes are thrown around interchangeably in the world of blockchain, but it’s important to know that these two things aren’t exactly the same thing, though they can often go hand-in-hand. ## Who Can Run a Blockchain Node? The beauty of cryptocurrency is how the entire technology is decentralized. This means that there is no central figure like a bank or government dictating the rules. That way, the currency is truly democratized, which was the main goal of Satoshi Nakamoto when they originally established and launched the Bitcoin technology. For example, other monetary services like Visa or PayPal are run by one central entity. This means a lack of transparency. But with cryptocurrency, everyone can run a node. Since this is a decentralized technology, there aren’t ridiculous barriers of entry that prevent you from running your own node. This is impossible with other services as you will need validation and confirmation from the top of the system before running a node yourself. With the blockchain, all you have to do is download its software on your computer to run a node yourself. That way, you can start mining Bitcoin by yourself from the comfort of your own home. That said, keep in mind that mining Bitcoin is a complicated process that requires a lot of power, so it will still take some work to effectively run a blockchain node yourself. One of the best parts of the blockchain is how everyone can participate in it. Of course, as the technology progresses and becomes more popular, establishing a node yourself will become harder. But this doesn't take away from the fact that just about anyone can start running a Blockchain node without having to worry about getting permission to do so. ## Reasons to Run a Blockchain Node So, now you know what a node is in crypto and that you can run one yourself with your personal computer. But the question still remains: why would you want to do this in the first place? Well, there are quite a few benefits to running a Blockchain node yourself. To start, this allows you to start mining Bitcoin yourself. Of course, it can be hard to mine Bitcoin nowadays due to the competitive market, but that doesn’t mean it’s impossible. However, we already discussed that mining and running a node are not the same thing. And for many people, running a node without trying to mine Bitcoin seems pointless. But that’s far from the case. There are tons of benefits that extend further than just mining Bitcoin. And in this section, we’re looking at some of the key reasons you might want to start running a Blockchain node yourself. ## Little To No Investment Required To start, running a node doesn’t require a lot of gear or a large monetary investment upfront. If you plan to run a node to mine Bitcoin, you might need a powerful rig. However, when it comes to running a node to help sustain the cryptocurrency ecosystem, you can do it with any standard computer. All you really need is a computer with at least 2GB of RAM, a 350GB hard drive, and an unmetered internet connection. Nowadays, most people have access to a computer like this. And even if you don’t, these are some of the most affordable specs available, so it’s a very small investment anyway. As we mentioned earlier, it doesn’t take much to set up a crypto node. With your personal computer, all you have to do is download the Blockchain software, and you can set up the node. From there, the blockchain uses your personal node to verify and update your balance instead of using another person’s node. That said, most personal nodes aren’t full nodes. So, that still means that you will have to connect to a full node to be able to run the node and communicate with the network. ## Access to Governance Bitcoin and cryptocurrencies are not a central network. The entire point of Bitcoin was to establish a decentralized currency that everyone could access as needed. So, whenever there are changes made to Bitcoin and its infrastructure, the majority needs to agree to the change, or else it won’t push through. That said, to access this system, you need to have a node. The Bitcoin infrastructure can only change when there is a majority vote from the nodes. So, if you have a node, you can actively participate in governance and give yourself a voice in the large crypto community. For example, if Bitcoin proposes a new network update, the nodes have to send a vote on whether or not they support the update. If the majority votes yes, then the change will go through. But if the majority doesn’t support the update, it won’t happen. There can be occurrences when the network undergoes a division or split due to disagreements within the community. If you have a full node running during a split, you even get to choose which side you continue with, giving you more autonomy when navigating through the crypto world. On top of that, you get more autonomy with a node. The whole point of Bitcoin is to eliminate the need for a middleman for monetary transactions. But if you don’t have your own node, you still have to go through a third party to access the network. A node allows you to fully participate in the crypto ecosystem and community. This includes allowing you to vote on changes and updates as well as giving you direct access to the blockchain. ## Make the Network Safer The biggest reason you might want to establish your own Bitcoin node is to make the entire network more secure. Remember, since Bitcoin is decentralized, it requires the active participation of the community to survive and maintain its security. Nodes are very important to Bitcoin’s security, and running one yourself directly makes the network safer and more secure. This can entice more people to participate in the community, which can then lead to Bitcoin really entering the mainstream and being adopted by the general populace. On top of that, running a node also ensures that miners and other nodes on the network abide by all the rules in place to keep the system sustainable. If you run your own node, you get to access the full security of using Bitcoin. The downside to not having a node is that you still have to go through a third party to access the network. Running a node eliminates the need for a third party, allowing one to truly participate in the blockchain community. With a node, your Bitcoin wallet is stored directly on your system. Without a node, the wallet is stored on a third-party service. So, having a node gives you privacy, and full autonomy over your finances like Bitcoin originally promised. ## Conclusion The world of Bitcoin and cryptocurrency is both complicated and pretty dense. This can make it hard for people who want to get into the crypto community as it creates an unnecessary barrier to entry. However, this complicated system is the reason Bitcoin and cryptocurrency can work in the first place, so it is very beneficial to understand how this system works and why it’s important. To do this, it’s best to take things one step at a time. So, you can start by understanding the individual concepts involved with cryptocurrency, such as nodes. And once you have an understanding of nodes in cryptocurrency, you can start moving on to the more complex concepts. After that, you can start fully participating in the community and reaping the benefits of a decentralized monetary system.
12 Best Crypto Staking Platforms in 2022
Crypto staking is a new way of earning rewards from your cryptocurrency holdings. It works a little bit like traditional stock trading, but with the added bonus of earning rewards for holding your coins. What could be better than making a passive income with very little effort? One of the best ways to increase your investment in crypto is with crypto staking. Not only will you earn rewards by investing, but help to stabilize and increase the value of blockchain networks, which in turn boosts your projected returns. The best crypto staking platforms offer high returns of above 20% per annum. There are very few centralized investments that can offer investors those kinds of returns which is what makes crypto staking so attractive to investors. You can make use of a staking platform to streamline and automate the process of staking crypto. With so many crypto staking platforms to choose from, we will go over our top 12 of the best crypto staking platforms for both old and new stakers alike. Table of contents - What is Crypto Staking? - How to stake cryptocurrencies - How to choose the best platform for crypto staking - Best crypto staking platforms to earn passive income - 1. Coinbase - 2. Binance - 3. KuCoin - 4. Gemini - 5. UpHold - 6. CakeDefi - 7. Kraken - 8. BitStamp - 9. MyCointainer - 10. Stake.Fish - 11. - 12. eToro - Conclusion ## What is Crypto Staking? Crypto staking is the process of holding onto your cryptocurrency in order to support the blockchain network and earn rewards. When you stake your coins, you are essentially locking them up so that they can’t be used for transactions. In return for supporting the network, you earn interest on your stake. Staking is a great way to earn rewards on your investment without having to do any extra work. If you are interested in earning rewards from your crypto holdings, then staking is a good option for you. There are many different platforms that offer staking services, so be sure to do your research before choosing one. In order to start staking crypto, you must choose a crypto asset held on a blockchain that supports proof of stake. A proof-of-stake blockchain is a type of blockchain that uses a different method of security than the majority of blockchains. With a proof of stake blockchain, participants holding crypto tokens deposit these tokens into the node they are voting for. This constitutes a "stake" in the network, and as such, these nodes can earn rewards for verifying transactions and maintaining the network. Whereas with Bitcoin and other Proof-of-Work blockchain models, users who hold a large number of coins are more likely to be chosen to verify and append new blocks to the blockchain, with Proof-of-Stake this is not always the case. Proof-of-stake blockchains use a different algorithm than proof of work blockchains. The most common algorithm used in proof of stake blockchains is called Delegated Proof of Stake. This algorithm requires users to be chosen as validators on the blockchain. This means that users who are chosen as validators are most likely to be chosen because they have earned the trust of the community. Proof of stake algorithms are popular because they are energy efficient and require less CPU power than proof of work algorithms. To add new transactions to a ‘proof-of-stake’ blockchain, participants must first make a pledge to the protocol. From among these participants, the protocol then selects validators that will confirm blocks of transactions. The more crypto staking coins participants pledge (aka staking crypto), the higher chance they have of being selected as a validator and receiving a reward for successfully adding blocks onto the blockchain. This acts as a security blanket to make sure that stakers are getting rewarded for picking out trustworthy validators, and losing out when backing bad ones. There are a number of different ways to take part in the staking process without needing too much technical know-how. ## How to stake cryptocurrencies Cryptocurrency staking is a process by which users can earn rewards for holding onto their digital assets. By “staking” or holding cryptocurrencies in a wallet, users can help validate transactions on certain Proof-of-Stake (PoS) blockchains and earn rewards for doing so. In order to stake cryptocurrencies, users need to have a digital wallet that supports the cryptocurrency they wish to stake. Some popular cryptocurrency wallets that support staking include Trust Wallet, Atomic Wallet, and Coinbase Wallet. Once you have a supported wallet, you will need to deposit your chosen cryptocurrency into the wallet. Once the deposit is confirmed, you will be able to start staking crypto assets and earning staking rewards! There are a few different ways to stake crypto which we'll touch on below. First up, To stake your cryptocurrency, you can choose an exchange to handle the details for you. The exchange will find a node for you to stake your cryptocurrency and take a commission from your investment. Next, you could opt to join a staking pool. A staking pool is a collection of many crypto investors. These investors collectively invest their coins and share the profits of staking rewards, but need to be coordinated to avoid creating problems. Most pools are privately organized with high entry barriers because of the complexity involved. Another option is staking through DeFi. DeFi is the opposite of the traditional financial system. It allows you to stake crypto using a smart contract. DeFi relies on a specific blockchain network to facilitate trade and provides income for investors without trying to convince them to invest in an organization's token. Without any middleman, DeFi staking is often much cheaper. The final route is making use of a staking platform. One way to avoid pitfalls is to try staking services with the goal of uncovering sensible investments by entrusting them to the provider. They are useful because they offer a way to bypass some of the complexities while still being decentralized, which is one of the philosophical advantages of crypto investments. We will cover some tips for choosing the best staking platform below because choosing the right one can be really tough. ## How to choose the best platform for crypto staking When it comes to choosing the best platform for crypto staking, there are a few things you need to take into account. First and foremost, you need to make sure that the platform is reliable and secure. There are a lot of platforms out there that are simply not worth your time or money. Second, you need to make sure that the platform has a good reputation. There are a lot of platforms out there that claim to be the best but don't live up to their hype. Finally, you need to make sure that the platform suits your needs. Different platforms offer different features and benefits, so it's important to find one that fits your particular needs. There are also a couple of other key factors to consider when choosing the best crypto staking platform. ### User-friendliness In order for a crypto staking platform to be successful, it must be user-friendly. If users are not able to easily navigate the platform and find the information they need, they will likely move on to another platform. A user-friendly crypto staking platform will have an intuitive design that is easy to use. It should also provide all of the information that users need in order to make informed decisions about their investments. ### Competitive fees When it comes to staking your cryptocurrency, you want to choose a platform with low fees so you can maximize your earnings. With a platform that charges high fees, you will end up losing a significant portion of your earnings to those fees. When choosing a crypto staking platform, be sure to compare the fees charged by each one so you can choose the one that will give you the most bang for your buck. ### Network compatibility Not all staking platforms support every single cryptocurrency and blockchain network. The majority support the big players like Ether, Bitcoin and Solana, but if you want to stake lesser-known alt coins, you should check that your staking platform is compatible with the network. ### Client support When you are choosing a crypto staking platform, it is important to consider the customer support that is available. A good customer support team can help you with any questions or problems that you may have, and they can also help to resolve any issues that may arise. Having a good customer support team available can make a big difference in your overall experience with the platform, so it is definitely something to keep in mind. Read a couple reviews of your shortlisted platforms to get a better sense of the type of support they offer. ## Best crypto staking platforms to earn passive income It's no secret that crypto staking has become one of the most popular ways to earn passive income from digital assets. But with so many different staking platforms to choose from, it can be difficult to decide which one is right for you. To help you make an informed decision, we've put together a list of the best crypto staking platforms available today. We've also included a brief overview of each platform so you can easily compare and contrast the different features on offer. So, without further ado, here are the best crypto staking platforms to earn passive income: ### 1. Coinbase
What Is Crypto Staking: The A-Z Guide
If you've been in the crypto game for some time now, you've likely come across the term crypto staking somewhere along the way. Crypto staking can seem like a complicated idea but it's actually incredibly simple. So what is crypto staking then? At its core, crypto staking allows crypto investors to earn rewards for holding specific cryptocurrencies. Basically the networks incentivise traders to buy and hold their tokens by offering a form of passive income to these traders. Whether you want to ramp up your crypto staking or you're just getting started, we'll unpack all there is to know about staking crypto.
How to Play Splinterlands
The opportunity to earn income digitally through NFT-based games ignites a passion for gaming worldwide. Lucrative chances offered by these crypto-fueled games have intrigued enthusiasts and non-enthusiasts alike. Millions are jumping on the play-to-earn (P2E) bandwagon to cash in on the opportunity for financial gains. Among the top-rated NFT games, Splinterlands holds a sweet spot since it is one of the oldest and the most popular games in the crypto sphere. Known initially as Steem Monsters, Splinterlands is a Trading Card Game (TCG) built on the HIVE blockchain and adopts play-to-earn (P2E) mechanics which opens up alleyways for enthusiasts to earn real-world money. Today’s round-up includes a detailed overview of Splinterlands that emphasizes how players can play Splinterlands to earn lucrative awards and redeem them to their real-world pocket. Since Trading Card Games (TCGs) are one of the most iconic genres of gaming, wrapping your head around Splinterlands wouldn’t be a tough task for veteran players. ## What is Splinterlands?
How To Create a DAO: 6 Steps To Get It Done
DAOs are being advertised as the next technological revolution in spheres such as finance and business. These decentralized autonomous organizations are member-only communities, with no centralized authority, that leverage blockchain technology to pursue common goals. There are many advantages to implementing a decentralized organizational model over what’s seen in a traditional organization as DAOs benefit from decentralization, community-powered decision making and democratic voting to accomplish the interests shared by all its members. A crypto organization like a DAO also relies on smart contracts to ensure efficiency and transparency of all transactions. If you like how DAOs work and you want to create one, you’ve come to the right place. Dealing with blockchain might seem intimidating at first, but today we’ll help you create your first DAO the easy way. All it takes is having a mission, the right community and a few minutes to complete the technical side of things with the help of an easy-to-use DAO creation platform.
NFT Types: 10 Original Categories You Didn't Know About
NFTs have taken quite the beating as of late. After a stellar 2021, hopes that the market would reach new highs this year are somewhat fading amidst repeated scandals, digital heists, regulatory crackdowns and a downturn in the crypto market. But despite all the bad rap, blockchain technology has continued gripping investors, collectors and newcomers. Non-fungible tokens are slowly emerging as a central element of digital projects across a number of industries, from fashion and music to gaming and finance. Soon, we might be using this technology in our daily lives, so we’ve decided to put together the list of the different types of NFTs - and NFT projects - you might want to get familiar with today. ## 10 Types Of NFTs You Need To Know About
### Digital Artwork NFTs
X-To-Earn: A Deep Dive Into Crypto Monetization Models
Making money online isn’t a novelty. In anything, it has become an essential source of income for many of us. It’s easy to find appreciation for the convenience of working from home (or a beach in Bali, for the lucky ones), without the hassle of having to go to an office, clocking in and out, doing the whole Monday through Friday drill. There’s no arguing with the fact that there are countless ways of monetizing one’s skills and hard-work on the internet. However, the growing adoption of blockchain technology is presenting new ways of earning money, from playing your favorite online game and exercising regularly to learning new content or simply watching YouTube videos. It might sound too good to be true that you can get paid for doing the things you already enjoy doing, but the X-to-Earn model has become quite the rage lately. The technology is still evolving, which means that many more crypto monetization models are likely to keep appearing over time. But right now there are a few X-to-Earn strategies taking off: - Play-to-Earn (P2E): Rewards paid based on performance in blockchain-based games - Learn-to-Earn (L2E): Students can be compensated for sitting through lessons, competing assignments and quizzes - Move-to-earn (M2E): Meant to incentivize physical activity and fitness, users are rewarded for being on the move - Watch-to-earn (W2E): Users earn rewards for watching videos and other forms of digital content - Create-to-earn (C2E): Allows users to create and monetize content with NFTs The rise of X-to-Earn is tied to the development of Web 3.0, the expansion of blockchain-based digital economies and important concepts such as content ownership, proof of authenticity and economic opportunity in a new digital era. In other words, this model has the potential to transform how we work and engage with our favorite activities, especially when it comes to monetizing one of our most precious assets - time. Today, we’re exploring the X-to-Earn phenomenon and have a detailed look at the most common strategies currently used. ## Top X-To-Earn Models First off: what is X to Earn? Very simply, it's a business model powered by blockchain technology where users earn cryptocurrency rewards for doing a range of activities. Now that we know what X2E stands for, let’s dive into concrete examples of how it all works. ### Play-to-Earn (P2E)
Bloktopia Review: All You Need To Know About This Metaverse
As virtual worlds become a mainstream concept, crypto-based metaverses flood the market to satisfy the needs of a technologically advanced society. Without ever needing to leave your cave, people can communicate, engage, and learn alongside other enthusiasts worldwide in a medley of augmented and virtual realities. Whether it's the likes of Decentraland or Sandbox, the tech-savvy crowds have invested heavily into crypto-based metaverses and one such project, Bloktopia, is also gaining traction for its cyberpunk-inspired approach to the metaverse. One of the first metaverses to go live on the mainstream market, Bloktopia turned some heads with its revolutionary under-the-roof take on a metaverse. The metaverse is based in a skyscraper and consists of 21 levels or floors, as a contribution to the 21 million Bitcoins. Today’s round-up features an in-depth Bloktopia review aimed at offering our readers a deep insight into the sophisticated metaverse that’s partnering up with some of the biggest brands around the globe and putting themselves on the crypto enthusiast’s radar. ## What is Bloktopia
How To Play Alien Worlds
Let's talk about Alien Worlds, one of the many crypto games and NFT games. In these, you can play to earn money in cryptocurrencies. You'll need a WAX account to play Alien Worlds. This is one of the most popular games since the year 2021. Alien Worlds has increased in popularity, and many have decided to start playing it due to the cryptocurrency boom. One key element of the Alien Worlds features is the capacity to earn NFTs. In-game cards can make the task of mining Trillium more efficient. Every game card comes in packs; a rare pack can be useful if you want to invest in the game. ## What is Alien Worlds? Alien Worlds is a free game where you take on the role of a space explorer, also known as a miner. The planets and in-game quests of the Alien Worlds Metaverse await your arrival. The story sets the game in 2055. Some of Earth's inhabitants have discovered a way to escape the raging pandemics. The most advanced bitcoin mining community calls itself the Federation. They have noticed a pattern of messages in its algorithmic solutions. These messages came from an advanced Alien race, leading to a big discovery, a wormhole that allowed humans to travel to far-flung exoPlanets. Each player is provided with a set of three mining tools and a skill tree to mine, they can also choose a planet to explore and mine Trillium (TLM). ## What is the Alien Worlds Crypto Game? Alien Worlds is a mining game. The objective of the game is to obtain the material known as Trillium. This material can be found on mine planets, and it's the game's currency. Earn Trillium that gives you power in the Planet Decentralized Autonomous Organizations (Planet DAOs), every planet has one, and it's the Planetary Governance. ## Understanding Alien Worlds NFTs While you play Alien Worlds and Trillium is being mined, there is a chance to get a reward, a unique item in the game. This reward can be a tool, a minion, a weapon, or a unique avatar. These items are NFTs (non-fungible tokens) and are more difficult to obtain than ore. Alien Worlds NFTs exist on the blockchain and can be freely traded with other players. These NFTs are exchangeable for Trillium or other cryptocurrencies. The ability to get rewards is based on the combination of the luck of your tool and the planet's reward pool. Every NFT also has a use in the game. It can be used to have more mining power or be a specific weapon to equip on a minion. These NFT game cards have advantages in the game and every card has a color. The more shining NFTs are the best in the game. You can also get some at the beginning of the game by obtaining a game's launch pack. Alien Worlds is also a fighting game because you have to protect your land to protect your earnings. ### Alien Worlds Land
Best Blockchain Explorers In 2022
When you start getting serious about holding and trading cryptocurrencies, it is time to get a blockchain explorer. Trading crypto without a blockchain explorer is very much like trying to use the internet without Google. You’re left very much in the dark because the reality is, most people don’t fully understand what blockchains do. Blockchains are essentially public databases so a blockchain explorer allows cryptopreneurs to search for information on the blockchain. There are a lot of good options to choose from so to make it easier, we’ve selected some of the best blockchain explorers around. ## What is a blockchain explorer? A blockchain explorer is basically a search engine that allows you to conduct searches and easily navigate through a blockchain to track and trace blockchain transactions. Bitcoin and altcoin traders rely heavily on top blockchain explorers to keep track of and confirm transactions on the bitcoin network among others. You can track the balance of public addresses, coin transfer histories and transaction confirmations. It provides an easier way to manage and view cryptocurrency. To think of it simply, blockchain explorers are the Google of the crypto world. It is important to note that you need to use a blockchain explorer that supports the blockchain you wish to track. If you try using a Bitcoin block explorer to track Ethereum transactions, you’re not going to get very far. A blockchain explorer can also provide you with important decision-making statistics like the current hash rate, fees, transaction dates. In addition to this, the best blockchain explorers will display the following information: - List of recent blocks allowing you to explore recently mined blocks - Transactions in a given block - Transaction history of a given public address - Existing and previous public address balances - Explore unconfirmed transactions via Mempool Status - The ability to search for blocks, transactions and public addresses - View the largest transaction of the day - Double-spend incidents - Orphaned blocks - Genesis blocks (the first ever mined block) For a more technical explanation of how they, here’s a step-by-step overview: 1. They use APIs, rational databases and SQL databases along blockchain nodes to fetch information from the network. 2. The explorer software works by aggregating blockchain data to display in a searchable format. 3. Users can then use the blockchain explorer to search for information on a blockchain network such as transactions, addresses and more. The explorer responds to search requests in the same way a search engine would by displaying a list of results. 4. Search results are then displayed in a readable and easy to understand format. ## Why do we need blockchain explorers? While a crypto wallet can provide similar data, it is limited to the keys the wallet manages. Explorers, however, can be used to view data on transactions carried out on all wallets on a given blockchain. They provide invaluable information to crypto investors and developers. Some of the benefits of using a blockchain explorer include: - Transparent transactions by enabling users to check the balances and transaction history of smart contract addresses; - Check the validity of a blockchain address before sending someone crypto - Check whether the transaction has gone through to the correct person by checking wallet balances. It can give you a form of “proof of payment” to the receiver; - Explorers can help you troubleshoot delayed transactions by picking up errors or displaying the stage of confirmation; - Access to current information on fees and gas prices to help manage costs more effectively; - They can aid wallet programmers to check whether the wallets are functioning as they should; - They can be used to corroborate data and confirm whether third-party software is working correctly; - Aid companies, individuals and groups in making better financial decisions ## Best blockchain explorers When selecting the best blockchain explorers, we looked at a number of factors when making our selections. They have great user interfaces to make it easy to see the information you need most - obviously, this is the whole point of making use of a blockchain explorer in the first place. The most powerful blockchain explorer should also support the coins you trade and be compatible with your wallet provider. ###
What Is GameFi? Explaining Gaming On The Blockchain
Lying at the intersection of gaming and decentralized finance, GameFi is attracting widespread attention from the crypto world. For both players and investors, the appealing themes brought together by GameFi are re-shaping the way in which we interact with digital experiences and online games, from owning assets to making money for simply enjoying our favorite game. And as GameFi continues leading the race of technological innovations re-shaping the gaming industry, you might want to dive deeper into it. ## What Is GameFi? GameFi stands as the combination of the words “game” and “finance”. In doing so, GameFi brings together blockchain technology, including NFTs, cryptocurrencies and decentralization, and advanced gaming mechanics to create virtual environments where players can generate income from simply playing and enjoying their gaming experience. GameFi powers blockchain games where players are financially rewarded for the time and effort they put into playing. This model is better known as Play-to-Earn. Economic incentives might include tokens, upgrades, avatars, virtual land and much more. Typically, players are rewarded for completing game-related tasks like creating original content, mining resources, progressing through different levels and battling other gamers. Unlike traditional video games, GameFi allows players to not only earn and collect in-platform assets, but also transfer them across different games and platforms. In doing so, gamers can also monetize their experience by selling or trading their items. In other words, beyond the economic rewards, GameFi presents the players with the chance of owning digital assets that can be part of transactions across different platforms. This is made possible thanks to decentralization and NFTs, which bring a brand new type of digital ownership to the table. Until recently, games took place within a siloed, centralized ecosystem, controlled solely by developers. No matter how much time and dedication you’d put into playing your favorite title, at the end of the day your treasured collection of coins, prizes, avatars, weapons and other assets was never really yours and ultimately had no real world value. By letting players have real ownership over their gaming items, GameFi and play-to-earn have paved the way for an economy based on player empowerment. This trend is hardly something to be scoffed at. After all, the blockchain gaming industry saw a staggering 2000% growth between last year and the first quarter of 2022, with billions pouring into this segment of the market. The adoption of blockchain technology by developers is also driving a wider market expansion, with projections showing a double-digit growth over the next decade, to $545.98 billion by 2028. So, now that you know what GameFi is, let’s take a closer look at how it all works. ## How Does GameFi Work? While the concept is still fairly new, GameFi holds the promise of driving massive expansion across the entire industry by integrating gameplay, NFTs, play-to-earn and decentralized finance. As we explained earlier, in GameFi, digital assets like plots of land, avatars, virtual clothing, special powers and weaponry are represented by non-fungible tokens, allowing players to take ownership over them. Through gameplay, you’re able to earn more items and have the option of trading them via an NFT marketplace both inside a game and outside, thus opening up new monetization avenues. The specifics - and rewards - differ depending on the game, ranging from completing tasks, developing mini-games and building virtual infrastructures to designing wearables and battling other players. In addition, players are also increasingly drawn to GameFi and P2E because of the potential to earn passive income through renting, lending or staking assets. Before we more forward, let’s break down the main components of GameFi: ### Blockchain Blockchain technology is the foundation of GameFi platforms. The majority of blockchain games are built on the Ethereum network, although GameFi protocols like Polygon, Polkadot and Solana are increasingly being used as they have higher-capacity and speed features. Running a game on a blockchain’s distributed ledger not only enables player ownership but it also ensures that all transactions are transparent, fair and open. ### Non-fungible Tokens (NFTs) In P2E games, NFTs are used to represent assets and enable transactions in the marketplace. In- game NFTs can be exchanged for other NFTs, cryptocurrency of fiat money. Unlike traditional online games, P2E NFTs ensure that all in-game assets are unique and that they cannot be duplicated or fake in any way. A great number of P2E games are focused on encouraging players to pass through different game levels while monetizing virtual land and improving their digital characters (or avatars). ### Play-to-Earn Model In contrast to play-to-win games where players have to pay their way into and through gameplay, GameFi will reward you for just playing. As you keep progressing, you’ll amass digital collectibles, in the form of NFTs, and cryptocurrency. In return, players usually have to complete tasks, including winning battles and daily quests. These assets hold value and can be traded and exchanged in the marketplace. ### DeFi Components Many GameFi projects also integrate decentralized finance (DeFi) elements. Some of the top GameFi games will let players generate passive income through staking tokens, while others might let you earn in-game rewards in return for locking your in-game assets and cryptocurrency in smart contracts as part of a yield farming feature. When it comes to GameFi, Axie Infinity stands as one of the most successful games available and the title that helped pave the way for others in the industry. Launched in 2018, Axie is a monster-battling blockchain game through which users purchase NFTs of cute digital creatures that can be pitted against others in battles and challenges in return for the native token AXS. Axies can be traded on the marketplace for real money - and the value of these monsters has gone as high as $1.5 million. Adding to that, virtual land in this game has also attracted widespread attention, with a land sale last year reaching $2.3 million. By collecting, raising, breeding and battling Axies, players can increase their chances of getting more rewards. AXS tokens can also be staked to earn interest. Given that the majority of blockchain games have little to no entry fees, becoming a dedicated player can turn out to be extremely rewarding. A recent report released by Binance has highlighted GameFi as one of the major reasons why more game developers are embracing blockchain technology, citing the example of companies like Ubisoft, EA (Electronic Arts) and Tencent who’ve recently entered the blockchain gaming space. The report also shows that despite a downturn in the crypto market, the number of GameFi projects has continued to rise, reaching 1,551 games as of June 2022. ## Benefits of GameFi The cryptocurrency world is buzzing about GameFi, no doubt thanks to the many advantages brought by this new model. While you might already feel convinced, here are a few more benefits of GameFi to consider: ### Earn by Playing Let’s face it - doing what you enjoy the most and getting paid for it is a winning combo. And even more so in gaming. After all, the average gamer spends on average 8 hours and 27 minutes per week playing, so that’s a lot of time that could be easily monetized with GameFi. The world of video games has long been dominated by the “play-to-play” model, meaning that players have traditionally been forced to pay with real money for in-game items, including avatars, accessories and upgrades. However, this system is a one-way street since only developers make money in the gaming ecosystem, shutting out players and offering no opportunity for shared profits. With GameFi, players no longer have to be taken advantage of as money-making becomes accessible to everyone. Financial inclusion is then a major advantage of the GameFi model. ### Asset Ownership The integration of non-fungible tokens enables ownership of in-game digital assets. In reality, what this means is that unlike legacy games, game developers aren’t the sole authority having a say over gameplay and the scope of the assets within it. Once the legitimate owner of an NFT, you can rest assured that it’s you who gets to decide what to do with it, inside and outside the game. Another benefit from integrating NFTs into gaming is that, even if the game fails or the developers make modifications to a game, your assets won’t be worthless as you’ll be able to move them elsewhere. ### Compelling Gaming Incentives Under the GameFi model, the emergence of the first PE2 titles marked a major transformation in the industry, putting the traditional gaming revenue model into question. As we explained earlier, up until recently it was impossible for players to transfer and use their in-game assets outside the ecosystem of a particular game. Blockchain gaming upends that structure by enabling virtual tokens to be used across different environments and exchanged for cryptocurrency or fiat money. ### Participation At a Low Cost Gaming has historically required that players pay a number of fees, from purchasing the actual game to paying for upgrades. By comparison, the vast majority of titles in GameFi are entirely free to play, making it an accessible activity for more people. On the other hand, P2E games offer compelling rewards that keep playing costs close to zero. ### Taking Control Over Gaming Experience We’ve spoken about how NFTs help establish asset ownership, authenticity and control over in-game items. And while that is an undisputed upside of GameFi, this model ultimately translates into an improved experience across the board thanks to enabling players to take control over their entire gaming experience. That is particularly true in P2E games that offer governance tokens, allowing holders to have a direct say in product-related decisions and the future direction of the game. ## How To Get Started With GameFi Games As GameFi keeps flourishing, hundreds of new titles are emerging every month. We can expect every game to have its own mechanics requirements and gameplay. However, to get started with GameFi, there are typically a few common steps you’ll have to follow such as purchasing cryptocurrency and a crypto wallet to store and manage in-game assets. Here is how it normally works: ### 1. Set up a crypto wallet Before you try your first GameFi game, you’ll likely be asked to get yourself a crypto wallet, such as MetaMask or Trust Wallet. Feel free to explore our latest guide to the top NFT wallets available in 2022. However, one aspect to keep in mind is that your wallet must be supported by the blockchain in which the game is running, such as Ethereum and Binance Smart Chain. Depending on the game, you might also be required to use more than one wallet and blockchain network. We recommend that you check the game’s official website to make sure you have all these details worked out. ### 2. Connect your wallet to the game Before you start playing a blockchain game you need to connect your wallet to the actual game. This should be a fairly simple step, especially if you use an intuitive wallet such as MetaMask, helping you store and manage your game tokens and interact with different blockchain applications. ### 3. Check the game requirements In order to make the best out of your experience and maximize your earnings, it’s always best to get familiar with the ins and outs of a P2E game. For example, Axie Infinity will ask you to purchase three Axies before starting to play while other projects might have other prerequisites like the types of wallets they accept or cryptocurrency you can use across the network. ## Top GameFi Games Now that you know how to get started with GameFi, perhaps you’re interested in knowing what are the best blockchain games you can give a go today. We’re previously put together a list with 11 top options, but here’s a quick recap: ### Axie Infinity
Best NFT Wallets: Top 11 Options in 2022
Non fungible tokens (NFTs) have grown in popularity in the past year. They provide NFT users with verifiable proof of authenticity and ownership within blockchains. NFTs are representative of both real-world and digital assets such as artwork and property. Before you jump into investing in or collecting non fungible tokens, you will need to set yourself up with an NFT wallet. Then you’re all set to become a bonafide NFT collector. In fact, NFT wallets are a crucial part of the investment process as they keep your NFT collection and cryptocurrency in one convenient and secure location. So before you invest in NFTs from your NFT marketplace of choice, you should gain an overview of the various NFT wallets available to you. NFTs have become so popular due to the growing interest in crypto collectibles. This reasoning behind this trend is two-fold: firstly, many NFT collectors like to be able to say they own something rare; secondly, people enjoy owning a digital asset that will grow in value over time, making NFTs valuable investments. While they can certainly be considered a “new-age” investment, they hold a number of advantages over other cryptocurrencies. They can be traded with other collectors on exchanges and are therefore good for long-term investment. NFT collectors can also store their tokens in a wallet like they would do for any other crypto asset. ## What is an NFT wallet? An NFT wallet is a type of cryptocurrency wallet that supports the blockchain the NFTs have been built on. Your NFT wallet will need to also support the cryptocurrency you will use to purchase NFTs, for example, Ether. They provide a safe gateway to managing, buying and selling NFTs. Top NFT wallets serve as your crypto portfolio tracker to keep your NFTs safe. An NFT wallet doesn’t actually store your crypto and NFTs. They give you access to your digital assets that are stored on a blockchain. The wallet provides you with a private key that allows you to authorize transactions. A crypto wallet with NFT support removes the need to worry about any of the technicalities of buying and selling NFTs by providing an easy-to-use user interface. With two-factor authentication the norm with most NFT wallets, they provide enhanced security and a convenient way to keep track of your crypto assets. NFTs are built on various blockchains, so NFT wallets support certain or all blockchains. Here is an overview of the most common blockchains: - Ethereum: you will find this is the most common blockchain for NFTs. It has an active community who are continuously working on developing new features and bug fixes. - Solana: this is a very user-friendly blockchain and one of the fastest-growing NFT and cryptocurrency development platforms. Solana hosts a number of Web3 sites, NFTs and Defi applications on a few NFT wallets. - Polygon: this blockchain provides an affordable platform for users to launch NFT projects on. It is suitable for users looking to establish a large portfolio in the best NFT wallets. - Cardano: this blockchain uses a proof-of-stake system. This feature makes Cardano a top NFT wallet provider. Users are able to create NFTs and other highly-scalable DeFi applications. - Tezos: this blockchain uses a proof-of-stake system for NFT wallets. It is an affordable blockchain network which makes it suitable for creators of NFT projects and for the storage of NFTs. - Binance Smart Chain: this is a simple blockchain network that allows developers to design and launch projects quickly as well as to securely store NFTs. BSC also offers very fast and affordable NFT transactions in some of the best NFT wallets. ## Types of NFT wallets You will need to decide whether you prefer using a custodial NFT wallet or non-custodial NFT wallet. Here is the difference between the two. ### Custodial NFT wallets When you select a custodial wallet, a third-party controls the private key and essentially acts as the custodian. They will guard your key and keep your NFTs secure. These wallets tend to be easier to set up as you do not have to remember a complicated private key. Custodial NFT wallets normally require the completion of a KYC process, which can compromise anonymity. ### Non-custodial NFT wallets A non-custodial NFT wallet allows NFT users to trade and access NFTs on their own. In this case, you are responsible for storing and remembering your private key. Should you lose the private key, you will lose access to the NFT assets forever. ## What can you do with an NFT wallet? NFT wallets take care of all the complicated tasks that come with trading NFTs to make the user experience seamless. However, despite all this happening in the background it is still helpful to know exactly what is going on. ### Store NFT private keys Despite being called NFT wallets, your NFTs are not actually stored in a wallet. They are always stored on the blockchain so you never actually have them in your possession. An NFT wallet will store your private key which gives you access to your NFTs so you can easily manage, buy or sell your NFT assets. Whoever has the private key has access to your NFTs so it is imperative to keep your key safe at all times. ### Transfer NFTs to other wallets In order to purchase most NFTs, you will need to hold cryptocurrency. The best NFT wallets will allow you to hold crypto in your wallet in order to facilitate purchases. #### Connect to dapps and marketplaces The best NFT wallets will be able to connect you to NFT marketplaces. Some of these decentralized marketplaces may require you to link your NFT wallet to the marketplace in order to purchase NFTs. It is important to use an NFT wallet that supports the marketplaces you wish to purchase NFTs from. ## Choosing an NFT Wallet: Things To Consider There are a few important considerations to make when selecting an NFT wallet. ### Multichain compatibility Your NFT wallet should be compatible with as many blockchains as possible. While the majority of NFTs are supported and built on Ethereum, there are an increasing number of blockchains which also support NFTs. Therefore it is important to select a wallet that allows you to easily access NFTs across a number of blockchains. ### Security Selecting a secure NFT wallet is of the utmost importance. Your wallet of choice should offer excellent security to safely protect your NFTs and other digital assets. The best NFT wallets will offer two-factor authentication as a standard security protocol, which adds a layer of security to your account, preventing hackers from gaining access. Your NFT wallet should have secure encryption technology to protect your assets from malicious attacks. ### Anonymity It is important to keep in mind the level of anonymity and privacy the NFT wallet can provide. For example you may find that certain wallets have weak privacy settings that allow anybody to see transactions made. The ones with stricter privacy policies, however, can have a less user-friendly interface because they do not have integrated exchanges. Do keep in mind that personal data is highly sought-after in the current market so selecting an NFT wallet that protects your personal information is a fairly important consideration. ### User experience User experience is an important consideration when selecting an NFT wallet. When the user interface is easy to use and understand, it makes buying and selling NFTs much simpler. ### Pricing Price is another consideration as it can affect the profitability of trades. You need to look into the conversion fees your NFT wallet charges. If you buy cryptocurrency with fiat currency, you may be charged for the currency conversion. Pay close attention to fees related to withdrawing and depositing NFTs as well. ## Best NFT Wallets We have selected the most popular NFT wallets, each with their own set of features. We will highlight their best features and some of their pros and cons below. ### Metamask Wallet
Top Move-to-Earn Games To Play In 2022
Play-to-earn has become a defining trend in both gaming and crypt. The idea that you and I could be rewarded with real money in return for spending time doing the things we enjoy the most, like playing an online game, is certainly appealing. And without any specific entry requirements or skills needed, this economy has boomed into a massive market with millions (quickly swelling into billions) of dollars at play. Taking inspiration from the success of the P2E model, there’s similar phenomenon now growing that aims to link gaming and crypto to health - Move-to-Earn. Simply put, M2E apps and games track real-life movement and reward its users for the physical activities they’re engaged in. This way, your morning walk, Saturday jog or weekly sports practice can be easily monetized. At a time when we as a society are increasingly more concerned about health and fitness, having apps that not only promote a healthier lifestyle but that also provide a monetary incentive in return for being fit can have significant value. With that said, today we're delving deeper into what makes move to earn games the next big thing - and which apps top the best of the best. ## What Is Move-to-Earn (M2E)? The move-to-earn trend started taking off during the Covid-19 pandemic, with many of us confined to our homes or short walks around our neighborhoods. The scrambling for inventive ways of keeping active kicked off the popularity of M2E as more people strived for the extra motivation not to turn into a couch potato. It also became an unexpected way of making money while staying at home and going about routine physical activities, no matter how small. Move-to-earn combines blockchain technology with gaming and fitness, incentivizing users to keep an active lifestyle in return for a wide array of rewards, usually tokens that might have real life financial value. The idea of rewarding users for exercising is far from being new. After all, when Pokemon Go was launched six years ago, the game led to a global furore with players taking to the streets of cities all over the world in a bid to catch Pokemons. The game - still available and popular today - makes use of a player’s smartphone’s GPS and camera to geospatially overlay a Pokémon onto real world locations, enabling new creatures to appear as the user keeps walking through different places. With M2E apps, the move you move, the more you earn. In addition to your regular physical activity routine, you can also take part in the fitness challenges promoted by many of these platforms. The rewards vary from platform to platform, but generally speaking rewards come in the form of tokens and they can be exchanged for other forms of crypto or simply cashed out as fiat money. In addition, if you’re feeling generous, you can simply choose to donate your tokens towards a charity or social projects that speak to your heart. The number of M2E games has seen a great rise in the last year, in line with other developments in emerging technology like VR, AR and blockchain. We’ll walk you through the top apps you need to know in 2022 a little later on. ## How Does Move-to-Earn Work? Getting started with a ME2 application is easy as the model is already pretty straightforward itself. Move to earn apps use a smart device like a phone, watch or wearable and its movement detection capabilities to collect behavioral data about the user. This data includes GPS-enabled features such as location and distance covered in addition to number of steps and calories burnt. The information collected about the user’s body activity is then converted by the M2E app into in-platform rewards. Now, you might be wondering whether this is not a model that can be easily exploited by cheaters. Yes and no. Surely, there will be people who would want to try and game the system (pun intended). However, the leading M2E games and applications in the market have many protocols in place to separate legitimate users from those trying to take advantage. Some of the most used anti-cheating measures include using machine learning and data collection to detect abnormal activity levels and token generation, while working to establish the authenticity of a user’s fitness data. Limits can also be put on the number of tokens earned during a specific time period. Fraudulent users using bots and GPS spoofing are more than likely to get caught and banned from these apps. ## How Exactly Do you Earn Crypto With Move-to-Earn? Fortunately, there are many ways in which you can earn while staying fit. Better yet, you won’t always have to actually break a sweat for it. Here are a few strategies: ### Exercising When it comes to earning crypto (and real world money) with M2E, getting physical is the way to go. After all, the whole concept revolves around physical exercise and incentivizing fitness while rewarding those making an effort to improve their health. The best move-to-earn apps reward users with utility tokens and NFTs. These earned tokens can then be traded for goods and services, sold in exchange for other cryptocurrencies or swapped for fiat money via a cryptocurrency exchange. ### Minting Some M2E apps allow their users to earn crypto by minting new NFTs, which can then be bought, sold or exchanged through dedicated marketplaces. NFT sneakers are currently the most popular digital assets users are likely to come across in a move-to-earn game or app. ### Trading The more active you are, the more rewards you’ll be getting. As such, you’re likely to find yourself owning a collection of in-game items that might have incredible value in the marketplace. Take for example the running shoes in the StepN app. Those can be worth hundreds of dollars depending on features such as rarity, efficiency and resilience. And as players of this app can choose to breed new NFT sneakers, their value has tended to rise. ### Staking While being active is key in getting rewarded with M2E, that doesn’t mean you can’t make your tokens work for you during your downtime. With staking, users are rewarded for simply holding on to their tokens. And return for allowing their idle crypto to be used for other operations on the platform, users are paid an interest. In other words, staking is very close to having a regular savings account. ### Renting Another way of monetizing your M2E experience is by simply renting your digital assets to other users. For example, you can rent your virtual sneakers and get a cut of the earnings of the person they’ve been rented to when they complete missions like fitness challenges and marathons. ## Why Should You Try M2E? One of the main reasons why move-to-earn has become one of the most talked about crypto trends of 2022 boils down to its wide appeal. What’s not to like about getting rewards for the things we already have to do anyways, from walking the dog to the daily work commute. If you’re looking for motivation to stay active, knowing you’re earning money for it can also be a great incentive. And that’s not to mention that, unlike other crypto-related ventures, M2E can be a low risk commitment that has no hidden fees or upfront payments needed to enter the blockchain world. Instead of having to choose whether to play games or go out and break a sweat, with M2E you can do both while having great fun at the same time. ## How to Choose the Best Move-to-Earn App Just like with any play to earn game (feel free to check our previous post on the topic), there are a few indicators to watch out for when choosing the best move to earn game or app. ### Accuracy First are foremost, you'll want to make sure your app is accurately measuring your physical activity. Not all apps record data in the same way, leading to situations of both over and under report. It goes without saying that this is less than ideal, especially when your rewards depend on it. ### User Interface Let's face it - no one likes spending unnecessary time trying to figure out how to work with a new app or game. A user-friendly interface is essential in convincing new users to place their time and trust onto a platform. The best move to earn games should be simple and straightforward. ### Simple Signup We're all looking to get straight into the juice, without spending too much time filling in our personal details and other KYC data. Some crypto apps can be a turn off by complicating their sign up process, but the good ones will have understood the benefits of making it short and sweet. Now that we’ve enticed you this far, get to know the best move to earn games and apps worth breaking a sweat for. ## The Top 10 Move-to-Earn Games You Should Try Now
### Stepn
How to Play Axie Infinity
Ever since the maturation of cryptocurrencies, blockchain gaming took the world by storm with its lucrative offers. From P2E games to gigantic metaverses, the virtual world is now a playground for millions around the globe to turn their tech-savviness into a lucrative means of earning. In the Play-to-Earn (P2E) spheres, Axie Infinity is dominating blockchain gaming with its immersive offerings. Developed by Sky Mavis, Axie Infinity is the most popular P2E game on the market with millions of players joining each day to dip their toes into the blockchain gaming scene.
The concept of the Play-to-Earn (P2E) feature incorporated into Axie Infinity opens up alleyways for its players to earn lucrative awards by engaging with the gameplay. Over the past couple of years, millions of players have tested their might against some of the most powerful Axies of the metaverse and managed to rack up lucrative offerings, courtesy of the rewarding gameplay of Axie Infinity. While this game may seem like a simple card game, there are many factors that contribute to the success of the person. In case someone wants to experience the immersive world of this P2E title and get paid for it, they will want to learn how to play Axie Infinity. ## What is Axie Infinity? Axis Infinity revolves around powerful NFTs referred to as ‘Axies’ which square off against opponents in turn-based style combat. Each player controls 3x Axies and engages in Pokemon-inspired gameplay where each side gets to land attacks of their own using various attack cards in their arsenal. Built on the Ethereum blockchain, Axie Infinity features player-versus-environment (PVE) and player-versus-player (PVP) modes. By engaging in these modes, players earn SLP and AXS, two main tokens in the game’s ecosystem. These tokens are used for various utility purposes including purchasing supplies in the Axie marketplace to breed the Axies. Axie Infinity was released in 2018 and Sky Mavis was the studio behind developing this revolutionary P2E game. Ever since its release, this P2E title soared in success with millions of sign-ups and a record-breaking 2.7 million concurrent users. Even with the proliferation of P2E titles on the market, Axie Infinity remains the most popular P2E title due to its impressive gameplay and monetary offerings. ## How does Axie Infinity work? Axie Infinity features Arena mode (PVP) which allows players to face off in a turned-based style of battle and rewards the winners for excelling in their strategies and dominating their opponents. To do well in the Arena mode and get rewarded in SLP, players are required to battle with resilient Axies and devise clever strategies to defeat formidable opponents. Similarly, Adventure mode (PVP) lets players engage with the cute monsters of the wild to get rewarded in SLPs. There are a total of 36 levels in the Adventure mode and defeating each level would award Smooth Love Potions (SLP) and experience points which would contribute to advancing the levels of each Axie. ## Axie Infinity Tokens Explained The ecosystem is fueled by a dual-tokenomics system with Smooth Love Potion (SLP) as the utility token and Axie Infinity Shards (AXS) as the governance token. Both of these tokens are offered to the players through the completion of various in-game objectives and challenges. ### What is AXS token? Axie Infinity Shards (AXS) is the governance token in the game’s ecosystem and it is an ERC-20 token with a fixed supply of 270,000,000. The AXS token is awarded to players for completing various quests and objectives. Furthermore, players can convert their SLPs into AXS tokens to be a part of the immersive concept of the Decentralized Autonomous Organization (DAO). AXS holders will have the ability to get a say in the future policies of the game. Since the game is operated through DAOs, players having a healthy amount of AXS tokens are the most likely to be able to influence game-related decisions. ### What is SLP token?
Best Blockchain Hardware Wallets
Blockchain hardware wallets are the most secure way to store your Bitcoins and other cryptocurrencies. A hardware wallet is a small physical device that safely stores your private keys in an offline location. If you are serious about trading crypto and the security of your digital assets, it is essential to invest in hardware wallets. Some seasoned traders even have multiple hardware wallets. There are a lot on the market so we will run through the best hardware wallets to help you make an informed decision. Hardware wallets can help crypto traders feel more connected to their funds and provide peace of mind that those assets are secure 24/7. Many traders may argue that most exchanges have reasonable security measures in place, but they are by no means bullet-proof. There have been a number of breaches over the years with some investors losing millions of dollars worth of crypto. Not worth the risk, right? A crypto wallet that offers cold storage mitigates this risk. You’ll find some exchanges that are a little shady or don’t invest enough in their security, unbeknown to their clients. Even if you are storing your crypto on the most well-regarded exchange, the bottom line is you are not in control of your assets. Your private keys are held by the exchange so if something goes awry, there is nothing you can do about it. The top crypto exchanges make security a top priority, often storing funds in cold storage - an offline mode that adds a layer of protection against hackers. Most will also require a Know Your Customer (KYC) process on sign up and have two-factor authentication in place. The drives that hold users private keys are sometimes even stored in highly secured vaults, lauded over by armed guards. Does this deter hackers? Definitely not…there is too much money at stake for them to steal. With new technological advances everyday, hackers can eventually find loopholes and ways around the most fortified security systems. In addition to this, is the question of ownership. You have invested in the crypto so should have full control over what is done with that investment, including having the keys to it in your possession. So what happens now if you decide you no longer want to store your crypto on an exchange. There are three options available to you. The first option is storing your crypto on a mobile wallet via a mobile app. Mobile wallets do provide you with greater control over your digital assets and give you more freedom to use the funds to pay for goods and services. Their downside? These crypto wallets are connected to the internet so remain vulnerable to attacks. Your next option is a paper wallet. With this route, you will print out your private keys, usually in the form of a QR code and store them somewhere secure. This does have its benefits, particularly if you plan on storing your crypto coins for years without selling or trading. The third option is a hardware wallet, the best crypto wallet for serious traders who hold large amounts of crypto. Read on for an explanation of what a blockchain hardware wallet is and for a list of the best hardware wallets. Each hardware wallet we cover below includes a very important security feature which is enabling backups of your private keys. This way if you ever lose your wallet you have the ability to restore your wallet and funds. It's vital to keep your security seed phrases somewhere safe to be sure you never lose access to your digital assets and lose money.
A Guide To Bored Ape Yacht Club
The Bored Ape Yacht Club (BAYC) is one of the most popular NFT collections out there. If you bought an ape in the early stages of the project, lucky you. In less than a year, the price of these NFTs skyrocketed, with many selling for over $200,000 apiece. Having an ape as a profile picture on Twitter has quickly become a sign of exclusivity and wealth. But being a part of this community goes beyond money and power. Owning the traditional ape, a mutant ape NFT, or even a Bored Ape Kennel Club NFT comes with its benefits. BAYC members are given unparalleled access to one of the world's most exclusive social clubs. From access to the mutant serums that allow you to create mutant apes, members-only events such as ApeFest, owning the commercial rights to some of the most exclusive NFTs out there, and more, many other NFT projects cannot compare. If you're looking to find out more about the Bored Ape Yacht Club, you're in the right place. From who owns BAYC NFTs and their benefits to who created the project, our Bored Ape Yacht Club Guide has everything you need to know.
Top 10 Defi Projects In 2022
Decentralized finance, also known as DeFi, has been a growing sector of crypto, with some $71.35 billion in total value locked across all networks (at the time of writing). And this is despite the current downturn in the overall crypto market. The DeFi space is seeing a number of successful projects blowing up, leveraging the best out of blockchain technology to replace traditional market makers and remove the need for intermediaries to power decentralized ecosystems, opening up finance to a wider group of users. Whether you’re looking for a loan or you’re an entrepreneur seeking backing for your next big project, DeFi could be the answer. Don’t know where to start? We’ve put together a list of the top 10 DeFi projects (and DeFi tokens) you ought to know in 2022. ## What Is Decentralized Finance (DeFi)? Decentralized finance covers a great number of financial activities that take place without the intervention of any intermediaries and centralized authorities, like a bank or the government. Some of the transactions you’ll see with DeFi resemble traditional finance, like loans, transfers, exchanges and insurance. But whereas a third party is required to validate typical fiat transactions, with DeFi smart contracts can be used across the entire system to enable a true decentralized ecosystem. In fact, this principle of decentralization can be applied well beyond just payments, lending and borrowing to all services that use cryptocurrencies and blockchain-based protocols. All of this can help not only tackle bureaucracy issues but also speed up transactions and enable a financial system that can be more transparent and accessible to people who would otherwise be shut off from the traditional financial system. ## Top DeFi Projects In 2022
### Polygon
What is Stepn? The Ultimate Guide To This Move-to-Earn App
Have you heard about the latest app the tech world is buzzing about, called Stepn? What is Stepn, you ask? Stepn is the first non fungible tokens game, powered by the Solana blockchain, revolutionizing the move to earn concept. It is a web3 lifestyle app combining AR with tokenizing everyday activities like exercise. Users can earn crypto tokens by walking, jogging or running with NFT sneakers, essentially a pair of virtual sneakers that determine how long you can train for and how much you can earn. The aim of Stepn is to motivate people around the world to get moving and exercise by rewarding them with crypto tokens. Stepn is the first fitness app to be built on the Solana blockchain. Not only can players earn tokens while exercising but there is a game element too. Players can drop treasure boxes during their sessions. As the first app on web3, Stepn has secured an impressive investment of almost $5 million from the likes of Solana Capital, DeFi Alliance and Morning Star Ventures - investors who share Stepn’s vision. The funding raised will go towards building an app that will inspire millions to get moving and improve their overall health while earning passive income.
How To Earn Passive Income With DeFi: Top 5 Strategies
Not so long ago, during the early days of crypto, blockchain assets had very limited uses. They could be traded or stored on exchanges and wallets. However, the emergence of DeFi opened up new ways of using crypto and maximizing returns, even when assets are simply left sitting on an account. In this context, you might have heard of the term “HODL”, which has become a go-to strategy in crypto for buying and holding tokens regardless of price swings. With Decentralized Finance, users can explore ways of earning passive income by putting their idle cryptocurrency (and other digital assets) to work on lending protocols, liquidity pools and decentralized exchanges, to name just a few options. Just like with depositing funds into a typical savings account, crypto users can also park their funds across a wide variety of decentralized platforms and receive interest payments and other rewards. In fact, the interest rates offered in crypto are often higher when compared to traditional finance. making it an attractive proposition. There are, however, a number of risks to consider such as wild market swings, ‘rug pulls’ and the bankruptcy of crypto platforms. That said, trying to earn passive income with DeFi can be a particularly advantageous investment strategy, particularly during the current crypto winter. There are many ways of going about it, from staking your assets and lending them to experimenting with yield farming and liquidity mining. To help you find your way around, we’ve put this guide together. ## What Is Defi? Let’s start with the basics. For those who’re not familiar with the concept, DeFi stands for Decentralized Finance. In other words, DeFi refers to financial products and services that run on a decentralized network of computers, removing the figure of a central authority or intermediary to help execute transactions. In this context, market participants interact via peer-to-peer (P2P). DeFi is seen as an alternative to the traditional financial system, run by banks, central banks, credit unions, governments and other established financial institutions. The operations supported by DeFi protocols such as payments, loans and transfers, run on a blockchain and are executed through smart contracts, which are self-executing computer programs. Based on all of these features, the technology enables the creation of a global financial system that can be less bureaucratic, more transparent, safer, cheaper and accessible to everyone. ## What Are The Advantages Of DeFi Much like cryptocurrencies, DeFi is being billed as an alternative to fiat-based platforms. In this context, financial operations like lending, loaning and staking can be done without the interference of an intermediary. Moreover, the use of smart contracts helps address inefficiencies in the system, lower costs and, often, minimize the risk of default by debtors. By challenging the monopoly of fiat currencies, DeFi can offer a new world of financial opportunities to users all around the world. ## How Does DeFi Passive Income Work One of the most popular applications of blockchain technology has become decentralized finance. For those who are ready to dip their toes into the world of cryptocurrencies but aren’t quite ready to make a big investment - especially in the current market - earning passive income with DeFi can be a good compromise. There are many ways of getting started, from staking digital assets to becoming a liquidity provider or going for yield farming, to name just a few. Do these terms sound like Latin to you? Fear not. We’re about to explore all ways to generate passive income with DeFi, one by one. ### Method 1 : Deposit Crypto For An APY One of the most straightforward ways to generate passive income with DeFi is to get an interest in return for depositing your tokens into an account. It might sound familiar to you as it’s similar to having a fiat savings account and earning an interest. However, these days interest rates are quite low, if not negative. With DeFi, the opportunity for returns can be significantly higher compared to a high street bank. Many DeFi platforms call this process “staking” and interest earned can be in the form of the same type of tokens staked or any other token supported by the blockchain. When you stake your crypto assets, you become a transaction validator, or node, for the network. This is very important to the network’s functionality and security, which is why stakers receive financial incentives to keep doing it. So how can you get started? The first thing you’ll need to do is to purchase cryptocurrency through a broker or a crypto exchange like Binance or Coinbase. Once you have it on a wallet, you’ll be able to deposit your coins onto a protocol or platform that will pay you an annual percentage yield (APY) for it. Coinbase, for example, offers up to 5% APY while the APY on other platforms like Aqru can go as high as 12% or more. There are many coins and tokens that you can use for staking, but keep in mind that the majority of DeFi platforms operate on the Ethereum blockchain, meaning that Bitcoin (BTC) isn’t typically accepted. Earning a passive income with this DeFi method is most suitable for the so-called “crypto hodler", that is the investor who’s looking to park their tokens in return for the payment of regular interest. There are a range of platforms to choose from, each supporting different coins, staking periods and - more importantly - interest rates. ### Method 2: DeFi Lending Lending is another recognized way to earn passive income with DeFi and there is a wide variety of platforms dedicated to this type of crypto lending protocols. Similarly to staking, which we just explained, you can earn passive income from DeFi lending by depositing your tokens into an account for some period of time. As you might already have guessed, when you lend crypto to a platform, you’re letting it lease it out to other crypto borrowers. In return, you get an interest. Normally, smart contracts will distribute accrued interest in proportion to the amount of assets you’ve locked in. Another advantage of DeFi lending comes from the fact that since the entire lending and borrowing process goes through smart contracts, the risk that a borrower will default is virtually zero. As such, your assets should always be safe. Most DeFi lending platforms will also let you withdraw your crypto at any time, without exit fees. ### Method 3: Yield Farming Yield is yet another way of supercharging your cryptocurrency while having it parked in exchange for interest or other types of rewards. Simply put, users of a DeFi platform can place their funds in a liquidity pool. Once these tokens are locked through a smart contract in a decentralized application (Dapp), users are awarded a fee or interest for allowing their assets to be used across the platform or borrowing and selling. Sounds familiar? Sure. It’s very much like depositing money in a bank account and letting it use it for loans and other operations, for which you receive a fixed proportion of the interest gained. In the same way, yield farms help ensure high liquidity across the DeFi ecosystem. People who lend tokens to DeFi platforms are often called “yield farmers” and they commonly switch between liquidity pools as a strategy to maximize their returns. As with any form of investment, it’s important that you conduct proper due diligence on the platform you’re planning to use as not only crypto coins have seen extreme volatility but unscrupulous developers are known to lead scams whereby they suddenly exit projects and run away with investor’s money (”rug pull’). ### Method 4: Become A Liquidity Provider Becoming a Liquidity Provider (LP) is yet another way to earn passive income with your crypto tokens. However, unlike staking or yield farming, where your cryptocurrency is being used to confirm transactions or fund crypto loans, liquidity providers have a different role - they are used to ensure that token swaps take place more efficiently and rapidly on a decentralized exchange (DEX) Liquidity providers are also referred to as trade facilitators and they are compensated via transaction fees for the trades they facilitate. Worry not, you don’t have to take an active part in any of these processes. A decentralized exchange like PancakeSwap, Uniswap and Yearn Finance, use automated market maker (AMM) algorithms to fill orders and process trading services automatically. As with other ways of earning passive income mentioned before, this too carries a degree of risk, particularly in the current bear market. But you can not only do your research before committing your funds but opt to contribute to assets held in highly-liquid pools with safer crypto assets. ### Method 5: Liquidity Mining Last on our list of the top ways of earning passive income with decentralized finance there’s liquidity mining. Again, here crypto holders lend their assets to decentralized exchanges and get rewarded in return. However, the difference is that liquidity miners tend to be rewarded in the native token of the blockchain they’re using and they also have a chance to earn governance tokens, maximizing the types of involvement they can have with a particular project. Like any liquidity pool, providers are rewarded based on the amount of the liquidity pool they provided for. ## What is the difference between staking, yield farming and liquidity mining, again? Staking is a way of earning rewards in return for holding certain cryptocurrencies. In blockchains based on the Proof-of-Stake (PoS) algorithm, stakers help vouch for the accuracy of transactions on the network as node validators. This also ensures the safety and liquidity of the platform. Yield farming is a service provided by decentralized exchanges (DEX) with the aim of giving buyers and sellers healthy levels of token liquidity. With this method of earning passive income with DeFi, users contribute to a common pool of funds (called a liquidity pool) and get rewarded for letting their funds be across other network operations. But while yield farming is a strategy aimed at gaining the highest yield possible, liquidity mining is focused at maintaining the integrity of the network while letting users also contribute toward shared liquidity pools. ## Bottom Line As you can see, there are many ways to earn passive income with DeFi, each with benefits and drawbacks. Considering the current state of play in the crypto market, opting for DeFi passive income strategy can be a reasonable move. But as mentioned before, make sure to do your research, consider the options that are the best for you and never invest more money than you can afford to lose. Disclaimer: This blog post is not investment advice and does not represent an offer or solicitation to offer or recommend any investment product. It is intended for general use only and does not consider your unique needs, investment objectives, or financial situation.
Decentralized Science — Your Guide To Blockchain In Science
From funding to publishing, modern science is plagued by countless challenges that have hampered human progress. However, developments in emerging technology like blockchain and Web 3 have put the concept of decentralization increasingly into focus in the field of science. Start-ups, research institutions and scientists are taking note of the potential for disruption and embracing a new paradigm known as Decentralized Science (DeSci), which aims to address critical issues in scientific research and development. In this guide, we’ll cover the basics of DeSci and why it’s important.
What Is A Token Swap: An In-Depth Guide
The huge success the emerging cryptocurrency industry has enjoyed over the last few years is largely a result of continual innovation. The economy has been forever changed by cryptocurrency, and it has in turn created a number of new, seamless ways to buy, store, manage and use digital assets. Early investors in crypto were met with many obstacles and complexities in handling digital assets, which have now been mitigated thanks to the above. One particular advancement is the introduction of token swaps, designed to reduce overhead costs and time spent exchanging digital tokens. It may sound simple but it can be hard to wrap your head around exactly what is a token swap, so let’s explore this guide to token swaps! ## What Is A Token Swap? The token swap process, also known as token migration, was initially quite a cumbersome task that cost a lot of money and took a lot of time to do. But this has become a much more seamless process. The concept of token swaps has two different definitions within the crypto industry. ## Direct Crypto Trades The first definition suggests an instantaneous exchange of one cryptocurrency token for another. This is aimed at those trading with two tokens. This is most often undertaken through popular crypto swapping services like Airswap, Changelly and Shapeshift, which often allow for multiple coin swaps. It is important to note old tokens and less popular tokens do not have this functionality due to their restricted availability, therefore such tokens cannot be swapped. ## Migration of Projects The second definition refers to transferring digital tokens from one blockchain project to another. This most often occurs when a project raises funds using one blockchain, and then at a later stage chooses to migrate to a different one. This can be for a number of reasons ranging from stability to scalability. The project’s native token is swapped for new tokens supported by the new blockchain network. So tokens from one blockchain are swapped for tokens from another blockchain. A token swap and token migration are the same thing, much like a coin swap and coin migration mean the same thing. An atomic swap, however, involves exchanging cryptocurrencies on different blockchains using a token swap smart contract, eliminating the need for intermediaries. As you know, atoms are indivisible hence where the name of this type of exchange comes from. Atomic swaps must be all or nothing and follow the exact exchange laid out by the smart contract, or the exchange doesn’t happen. Token migration doesn’t mean exchanging one token for another, but instead the replacement of one token with another that only comes into existence once the token swap occurs. Atomic swaps are therefore more geared towards buying and selling tokens through a token swap smart contract. Token swap involves a blockchain network upgrade or complete change of tokens. ## How Do Token Swaps Work? You are probably wondering, “how does a token swap work?” If you are an investor on crypto swapping sites and new to token swaps, breathe a sigh of relief as you will not need to actively do anything if a token swap occurs. These platforms enable exchanging by processing the token swaps and crediting your account with the new tokens. This simplifies the token swap process. Before crypto took off, crypto trading was a lot more complex and time-consuming. You would need to convert your digital asset to fiat currency and then use the fiat to buy your coin. This is called a crypto to fiat exchange. For example, perhaps you have COMP coins and wish to trade them for ZIL. You will find that a COMP/ZIL pairing is very rare and hard to come by. So you will have to trade your COMP tokens for a fiat currency or more established coin first and only then can you exchange the more popular coin for ZIL. Along the way, you would have been required to pay transaction fees a number of times. You could have also been making a risky move to a volatile crypto asset, impacting the profitability of the trade. I am sure you can agree this is not cost-effective and a tedious process. These challenges forced the crypto industry to innovate and as a result, platforms began facilitating instant token swaps. You can now do direct crypto trades by exchanging one crypto asset for another. Simply plug in the amount you want to exchange and the exact token pair to trade and you’re set - the platform instantly converts your coin. This way, you will only pay transaction fees once. The token swap process varies depending on the exact swap pair and the method of the swap. Here are two ways to swap tokens:
### Through An Exchange Using an exchange is the most popular way to carry out a token swap. Old tokens are stored securely in a wallet and once the swap is complete, swapped tokens are transferred to a new wallet. The wallet with the old tokens is destroyed. You can choose to withdraw or trade the new tokens. This is normally a better option because you avoid hidden fees and the process is straightforward. Exchanging crypto assets on exchange platforms automate and accelerate swapping tokens, making it a popular and convenient choice amongst new and experienced token holders. ### DIY token swaps This is a more complex approach to crypto exchange as you facilitate the token swap yourself. The token issuer will provide you with a wallet to download or prompt you to register on a site. You will, either way, receive two wallets - one for the old coins and one for the new. You will have to transfer the old token to a specific address, only after which your new wallet will be credited. This carries more risk than an automated exchange because the wallets and websites created for swapping tokens specifically can be very complicated for beginners. If you are new to token swaps, it is easy to make a mistake, which is often irreversible. Manual token swaps are best left to those well-versed in the crypto space rather than newbies, and even they still make mistakes. Manual token swaps are considered out of date and very time-consuming. As we mentioned above, sometimes you might want to execute an exchange between a rare token pairing. Only a few exchanges may ever happen directly between these coins, making them very hard to come by. Then you need to go via the cumbersome fiat exchange route which impacts your profits. Token swapping services eliminate these complexities by automating the entire process. ## What do We Need Token Swaps For? Traditionally, companies would issue shares, but blockchain and tokens open up new ways of investing with a variety of options and more control. In order to build up these blockchains and provide tokens, investment is needed. This can be mitigated by creating tokens on an existing blockchain by creating a second layer token on the native token, through smart contract functionality. An organization can therefore have their own custom tokens on other blockchains while they build their own blockchain. An example of a blockchain well-known for creating bespoke tokens is Ethereum. For example, a blockchain project would start off using the Ethereum blockchain to raise capital and distribute their custom tokens. Tokens distributed at this stage of the project would be placeholder tokens for the ones that will eventually be used when the project goes live. A token holder’s balances are then migrated from their Ethereum wallets to the new project’s wallets. Effectively, the tokens have been moved from one blockchain to another. This can be helpful when a project has reached a stalemate using its current tokens and needs to move to a new protocol in order to scale up. ## Benefits of Token Swaps There is great value in token swapping. Exchange platforms with token swapping functionalities offer crypto traders convenient, dynamic and secure trading gateways. Token swaps allow for a much speedier trade. Ensure smooth blockchain migrations When you are a token holder, you are required to register your tokens ahead of the token swap deadline to ensure they are migrated to the new blockchain. This is a process called mapping and can be complicated. Some wallets and exchanges don’t require transferring the coins prior to the token swap date, providing greater flexibility and ease-of-use for traders in the crypto space. ## Promote Cross-chain Interoperability Atomic swaps can promote the token swap’s atomicity. Cross chain token swapping opens the door for improved interoperability. The token swap smart contract functionality eliminates the need for third-party transaction fees, saving crypto investors money. ### Guarantee Data Integrity of Transactions The entire token swap and related transactions are kept on the blockchain, a highly secure gateway, thereby promoting data integrity and privacy. Smart contracts can be cost-effective as the transaction fees are transparent and expertly executed, saving traders money in the long run. ### Potential Risks Despite the need for token swapping and its many benefits, there are also risks to token swaps. Numerous exchange services exist, so when choosing a token swapping service, do your due diligence and choose wisely. When selecting a token swapping platform, always consider the availability of token swapping functionalities like which blockchain projects are supported, cross token swapping, availability of token pairings, speed of token swap processes and of course, platform security. Increased speed decreases the likelihood of slippage, which saves token holders from price fluctuations when performing a token exchange. Certain cryptocurrency exchange platforms offer fixed exchange rates, mitigating the risk of token value slippage, however increasing the cost of the transaction considerably. It is always important to be aware of the risks associated with crypto swapping exchanges. Depending on the platform used to exchange crypto assets, the transfer of virtual tokens can be visible to the public, impeding on the token holder’s privacy. Sometimes token swaps supported by smart contracts can limit the flexibility of the token swap. You are limited to hard deadlines and specific token pairings when swapping tokens this way. If you miss the deadline, the tokens will be sent back to token issuers or frozen, making it an all or nothing approach to cryptocurrency exchange as tokens will then be permanently inaccessible to users. If you find it hard to stick to these types of deadlines when trading, opting for open-ended migration may be a better option. When token swaps happen using a public blockchain, the use of a smart contract will be more expensive. The specified exchange rate may also add additional fees to an already expensive transaction, affecting the profitability of the token swap. ## Bottom Line There will always be flashy new crypto tokens on the market, attracting traders' attention away from traditional currencies. Token swap services make it possible for token holders to trade the current token for the desired token. It is now easier than ever to do token swapping with a number of exchanges, wallets and platforms designed to facilitate the token swap processes. It is important to always do thorough research before using an exchange in order to be aware of the associated risks and costs. These token swapping services play an important part in perpetuating the ongoing cryptocurrency renaissance by eliminating common barriers to entering the crypto space, facilitating traders to swap tokens with ease. Often, they provide an easy gateway to cryptocurrencies with low market capitalization. Using an automated token swapping service is a faster, easier, less complicated and more secure approach to trading crypto assets. It is because of this that token swaps will continue to feature prominently in the years to come.
Top LGBTQ-Inspired NFT Collections
LGBT Pride Month might be behind us now, but there’s no reason not to celebrate the movement all year round. There’s always an opportunity to shine light on the community and help advance the work of queer creators, many of whom are behind some of our culture’s most iconic art. The rise of non-fungible tokens (NFTs) and blockchain technology has been yet another valuable platform to showcase the talent and pay tribute to the members of the LGBTQI+ community. In addition, a great number of NFT projects are now also dedicated to raising funds for organizations championing the rights of lesbian, gay, bisexual, transgender and intersex people. Today, we’re looking at some of the best LGBTQ-inspired NFT collections you might want to know - and stand behind.
Free-to-mint NFTs: A Good Option For Creators?
As the crypto winter we’re now going through deepens, NFT creators are looking for ways to create buzz and sell their work while saving on heavy minting costs. That’s why a growing number of projects are opting to release non-fungible tokens via free-to-mint, a model that enables the creation of new NFTs with minimal commitment. And despite the overall downturn of the NFT market, free-to-mint projects are doing surprisingly well. So, what’s attracting so many to these collections? Let’s find out.
What is PancakeSwap? The Beginner's Guide
Decentralized finance, also known as DeFi, has been disrupting the traditional financial industry in the last few years. DeFi uses blockchain-related technologies to create a financial ecosystem while bypassing middlemen, brokers, and banks. Many argue it has democratized finance, allowing anyone with a crypto wallet and access to the internet to trade digital assets in real-time. With 4.4 million users worldwide and over 3 billion dollars staked, PancakeSwap is a leader in the DeFi sphere. What is PancakeSwap? A decentralized cryptocurrency exchange (DEX) built on Binance Smart Chain (BSC), the platform is powered by its very own CAKE token. Using an automated market maker (AMM) model, users trade digital assets through a liquidity pool, rather than being matched with someone on an order book. The PancakeSwap decentralized exchange allows you to earn passive income with crypto with innovative features such as the ability to play in a lottery to win free tokens. Along with its very own NFT marketplace, users can engage in trading, yield farming, staking, and more on the PancakeSwap platform. ## What is PancakeSwap?
What Are Social Tokens - All You Need To Know
Cryptocurrencies might be taking a beating at the moment but the industry is anything but hitting the brakes. One crypto phenomenon in particular is slowly but surely gaining traction - social tokens. These tokens are based on the idea of tokenizing the reputation of a person or community, and while this is far from being a novel idea, it's now getting a major boost from blockchain technology. But what are they, why are they on the rise, and why should you be paying attention to any of this? We’ll cover all the bases in today’s guide to social tokens. Let’s dive in.
What Is Blockchain Interoperability
In recent years, distributed ledger technology has attracted widespread attention, not just for being the platform that underpins cryptocurrencies like Bitcoin and Ether, but as a potential game-changer when it comes to bringing a vast number of industries and services into the Web 3.0 era. Driven by the promise held by capabilities and functionalities of this technology, the number of blockchain platforms has continued seeing a rapid rise. However, despite recent advancements and a generally positive reception, the fact is that the blockchain industry remains heavily fragmented, with platforms following wildly different approaches and adopting diverging protocols. This has put the issue of blockchain interoperability at the forefront of developer’s priorities. Just how will this unfold remains a question mark, but today we will be walking you through all you need to know about interoperability and the paths being followed to achieve it. Let’s dive in.
10 Best Metaverse Games To Play In 2022
The race for the metaverse is only heating up as 2022 continues seeing major digital projects come to life. And just how valuable could it all be? Short answer: very. Global consulting firm McKinsey is forecasting that virtual worlds can generate up to $5 trillion by 2030. In addition, the firm also says that it’s plausible that we will live more than 50 percent of live events could be held in the metaverse. You might be wondering then what it is that we will be doing in the metaverse that could possibly be that exciting. Gaming, for starters, is already attracting millions of users to virtual worlds. And this is just the prelude to something even greater ahead. With that in mind, we'll be looking at the 20 best metaverse games in 2022 that you’ll surely want to keep in mind or even try out today.
10 Most Expensive NFTs Ever Sold [June 2022 Update]
We’re well into 2022 but the NFT craze isn’t going anywhere it seems. Investors and collectors flush of money have continued pouring in money into non-fungible tokens, from cat memes to pixelated apes to popular NFT collections like the Bored Ape Yacht Club and a lot - and we mean a lot - of punk-like avatars. In fact, sales are on pace to surpass last year’s total and they’re on track to hitting a total $90 billion by the end of 2022 despite NFTs prices seeing a downturn as of late. But what’s really moving the market and what makes people want to buy NFTs for tens of millions of dollars? How about you see it for yourself as you go through the list of the top 10 most expensive NFTs sold so far. ## 10 Most Expensive NFTs
Top 10 Blockchain Companies in 2022
Blockchain technology wasn’t on anyone’s radar up until a few years ago. And it has since taken the world by storm, mainly because cryptocurrencies tend to capture all the major headlines. But blockchains - also called distributed ledgers - have been quietly revolutionizing many other aspects of our daily lives, particularly when it comes to the way in which data is managed, protected and shared online. To put it simply, a blockchain is a distributed database with a collection of records of data and information, stored in blocks, that are linked together via cryptography. Each block contains a cryptographic hash function from the previous block, a timestamp, and the data related to transactions. The first decentralized blockchain was conceptualized by Satoshi Nakamoto and introduced in 2008 as the distributed ledger behind bitcoin transactions. Blockchains can be public entities, such as Bitcoin, or private networks, such as those developed by governments for central bank digital currency projects, known as CBDC's (central bank digital currencies). But the use cases of blockchain have extended to many industries, playing an increasingly important role in all types of sectors, from finance to entertainment to urban management and supply chain solutions. Now that we know what the technology is and what potential it might hold, it’s worth getting to know the best blockchain companies in the world and what they can offer when it comes to using this cutting-edge advancement. ## Top Blockchain Companies in 2022 Blockchain is now a major industry that has birthed several billion-dollar projects. Let’s take a look at the top companies making waves in the industry. ### 1. Binance
What Is a DAO? All The Basics Covered
If you're into blockchain and crypto (hard escape to headlines about the recent meltdown, right?), you’ll surely have come across the word DAO. DAOs, or Decentralized Autonomous Organizations, are an increasingly important part of the blockchain world and a great share of crypto projects implement it as part of their roadmap. But what is it all really about? Let’s take a look at what is a DAO and how one such organization works.
Best Cloud Mining Services In 2022
With the growth of cryptocurrency technology and a new wave of investors looking for alternatives to traditional trading, cloud mining has become a popular phenomenon. But often with the good comes the bad. Ponzi schemes and scams have started surfacing on what appears to be legit cloud mining sites. Users too often invest their money into a cloud mining service they find online and out of the blue - the company vanishes. Instead of generating a steady stream of passive income, many find themselves losing thousands. Despite untrustworthy sites out there tarnishing the reputation of cloud mining, with the right company, cloud mining can be hugely profitable without users having to lift much of a finger. If you are looking to dive into the world of cryptocurrency without having the technical experience or millions in your bank account, cloud mining is the way to go. Mining crypto no longer has to be a costly investment that bumps up your electricity bill and consumes every hour of your day. Instead, crypto mining has made crypto more accessible to all. The key is to pick reliable cloud mining solutions that fit your investment goals. ## What is Cloud Mining? Cloud mining is crypto mining through the cloud - instead of owning hardware that will increase your electricity bill and cost you an arm and a leg. Participants outsource computational work for crypto mining where they rent hash power from a company that mines crypto on their behalf. Cloud mining has many advantages such as not needing to deal with maintenance issues, high cost of equipment, equipment deprivation costs, and energy costs. It makes your life a lot easier. Before getting caught up in the nitty-gritty details, what is crypto mining? Mining is what keeps the cryptocurrency model intact, the process by which transactions are verified and new coins are released to the blockchain. This process involves computers solving unhuman-like equations known as hashes, the fastest correct answer gets a transaction to validate and therefore a reward of that crypto coin. Through the cloud mining process, you outsource the equipment from a third party that solves these hashes through a cloud mining contract, without having to purchase your own expensive physical hardware. By renting cloud computing power, you do not need to install and run the hardware and software, allowing for hassle-free passive income. So, how do you make money from cloud mining? Cloud mining companies allow people to open an account and participate in crypto mining through a pricing model, usually a commission. Users purchase a certain amount of hash power and profits are allocated in relation to the hash power purchased and the current price of the coin. Companies tend to have cloud mining profitability calculators to provide potential customers with clues on earnings expected for a given hashrate purchased. ## How Does Cloud Mining Work? Cloud Mining is where two worlds collide - cloud computing and cryptocurrency mining. Cloud computing is where users access the processing power and storage capabilities of huge computer systems that are maintained by the companies that own them. Think Dropbox, Gmail, and Facebook. Cryptocurrency mining is the process where computers crunch difficult numbers to solve hashes, creating new blocks on the blockchain. Even the most powerful computers find it complex to solve these hashes. A fast answer allows miners to validate transactions and release new coins. Mining is the backbone of the cryptocurrency model not only for the validation and release of coins but also because it maintains the blockchain's security. The blockchain is a distributed ledger, a database that is shared and synchronized across multiple nodes, making it accessible to multiple people and allowing transactions to be visible to all. Cloud mining is the hybridization of these two concepts. Cloud mining companies will set up massive mining farms, larger than a single individual could manage and mine cryptocurrency using their systems. Cloud mining sites will then offer contracts to potential customers who can purchase a percentage of the hash power for a period of time. Picture a warehouse with thousands of servers and rigs, cooling technology, and enormous power supplies, as well as experts maintaining the hardware. Remember that the more powerful and faster a computer is, the higher the likelihood of solving a hash and generating a block in a cryptocurrency’s blockchain. Users are essentially sharing their computational resources by renting out a powerful cloud mining service, increasing the probability of generating a block. If successful, they are rewarded with cryptocurrency, but the amount each receives is calculated through their purchased percentage of hash power. Within cloud mining sites, there are two types of models - hosted mining and leased hash power. The hosted mining model is the most popular model for mining Bitcoin where customers purchase or lease mining hardware located on mining farms. The equipment is regularly maintained and replaced when necessary by the cloud mining service provider. Customers know that technical issues are taken care of at all times, whilst having direct control over their crypto. The second model of cloud mining on cloud mining platforms is leased hash power. This cloud mining model allows customers to lease computer power from a mining farm while getting a share of the farm’s overall profits from crypto. Instead of renting hardware, customers are leasing a fixed amount of hash power. This model is most popular for altcoins, all cryptocurrencies other than Bitcoin. All customers need to do is open an account on a cloud mining site with this model and select their preferences such as the hashing power and the time period of the mining contract. ## Best Cloud Mining Services In 2022 While cloud mining can be hugely profitable, the risk lies in betting on the wrong cloud mining companies. The key to achieving financial independence through cloud mining solutions is finding the right home for your money to minimize risk. The following list includes the best cloud mining sites on the market in 2022 that you can trust to generate reliable passive income. ### 1. ​​Shamining
Star Atlas Review: How to Play and Earn With This Metaverse Game
The blockchain gaming universe is focused on offering monetary gains to its players. Along the way, the fun part of the game is often neglected. Repeated scenarios, senseless gameplay, and mediocre mechanics plague the game which manages to deter casual gamers from dipping their toes in the lucrative world of blockchain gaming. However, a space-themed blockchain game, Star Atlas, plans to change that perspective by offering a diverse outer space experience of the cosmos. Built on the Solana Blockchain using Unreal Engine 5, there’s a strong buzz going on around the Star Atlas metaverse, and both blockchain gamers and casual gamers have strong expectations from the project. In its infancy, Star Atlas combines an MMO concept in space with modern decentralized mechanics to create a game that is unmatched. In today’s round, we’re offering an in-depth Star Atlas review consisting of every minor detail. Fascinated by the concept of exploring the unexplored parts of the cosmos, taking control over a fleet of spaceships, and minting NFTs? Read on to find out everything you need to know about Star Atlas.
What is MetaFi: A Beginner's Guide
We’re living through times of rapid technological change - and development - that has seen the recent rise of blockchain-based platforms like NFTs, cryptocurrency, DeFi and the metaverse. More recently, Binance introduced a new concept aimed at tapping into the infrastructures needed to power virtual economies that can function in parallel with the real world - MetaFi. Meta-what? Sure, we get it. Understanding all of these concepts and ideas can be quite dizzying these days. But we got you. In this article, we will be looking at what exactly is MetaFi (digestible way, we promise), how can we see it in action, what will all of it look like in the future and what exactly is the MetaFi DeFi connection. Let’s dive in.
Best Bitcoin Faucets 2022: Top Crypto Faucets To Try
Crypto enthusiasts are increasingly turning to bitcoin faucets as a way to earn bitcoin. Simply put, this helps them get acquainted with the idea behind virtual currency. To earn it, they have to complete easy but interesting tasks on a crypto faucet website, like watching video clips. Also, there is a variety of other platforms to choose from. A crypto faucet determines if one can earn bitcoin and at what rate. The hourly reward is sometimes lower than $1, which is unsatisfactory. However, there are some profitable websites on the market. This article will deal with the idea of a crypto faucet and present the highest paying Bitcoin faucets. Even though they may not be the best solution in terms when it comes to making money, they are a great option for those who have a full-time job and would want to earn some on the side. As you’ll see, the tasks are uncomplicated and can even be enjoyable. Let’s dig in!
What Are Smart NFTs - Definition, Types & Examples
NFTs are getting a lot of hype today, adding to the crypto craze taking over the online world. In recent years, the market for non-fungible tokens has been the fastest in the crypto and blockchain universe, with celebrities, brands and millions of buyers jumping on board. The technology has also attracted plenty of attention for the innovation and potential opportunities it holds. And while most of us will have heard of non-fungible tokens, many people still don’t know quite exactly what they are or understand how they’re being used. Today, we are taking a closer look at not only NFTs but also a new generation of non-fungible tokens that promise to take this technology to new heights - Smart NFTs.
How To Play Blankos Block Party
Blankos Block Party is a free-to-play multiplayer game that resembles the likes of Roblox and Minecraft and its developer, Mythical Games, is known for having the hefty backing of notable investors. In Blankos Block Party, players are able to create their own characters and worlds that other players are able to also enjoy. It incorporates elements of the Play to Earn model - a growing trend in gaming where players earn rewards through NFTs and can later trade them for real cash. Blankos is committed to becoming one of the top crypto games and leveraging NFT features, making it a title that has great potential to last and appeal to large audiences.
Best DAO Tokens In 2022
Crypto trends and blockchain technology are bringing a constant stream of new innovations that offer many promising opportunities. Businesses and individuals around the world have become aware of the potential of blockchain technology as new advancements such as DeFi emerge. Crypto trends continue to evolve as do the tools available to support them. Some of the best DAO tokens are a good example of how technological advances can drive DeFi governance. DAO members enjoy governance system privileges granted only by internet-native social organizations. Due to the growing interest in decentralized finance, the role of DAOs has become a focal point, too. The phrase refers to a decentralized autonomous organization — an association created around a crypto project or a financial goal that can't be achieved by one individual alone. An example of the goal might be to pool funds to buy an expensive piece of art. However, DAOs can also function as private clubs, where you have to purchase a particular NFT to gain access. The DAO crypto token can be used for many purposes, including investment, buying or crafting NFTs, fundraising, charity, and more.
How To Make an NFT: A Beginner’s Guide
NFTs were big in 2021. After all, Collins Dictionary chose non-fungible token as word of the year. And while we’re now seeing the non-fungible token market slowing down quite a bit, interest in the technology is hardly fading. Whether you’re a creator looking to branch out or just someone curious about this new world, there's no doubt that NFTs can be a great asset. That’s why we’ve put together a step-by-step guide on how to make an NFT - and possibly even help you earn some money from your creations.
Best Metaverse Wallets
​​NFTs have accelerated the use of personal cryptocurrency wallets, where users can keep and manage their non-fungible tokens. And with interest in the metaverse also rising, you might be wondering how will you be able to purchase digital things like avatars, virtual land, and add-ons, and where can you keep track of all your transactions in a virtual world. Enter the metaverse wallets. They’re essential to ensuring that you get the best out of your experiences in virtual worlds, storing metaverse tokens and opening one is a crucial step in getting started with NFTs and investing in non-fungible tokens (which are a major component of the metaverse). Today, we are listing the top metaverse wallets in 2022 and taking a closer look at the best functionalities each has to offer.
What Is A Dapp: Decentralized Apps Explained
With the rise and growing adoption of blockchain technology, focus is turning to a particular segment with immense potential - Decentralized Applications (dApps). In 2021, daily unique active wallets connected to dApps increased seven times, reaching an all-time high of 2.7 million at the end of last year. Trading volumes were also higher than ever. This helps underscore the kind of interest dApps are experiencing - and why you should take note of it. Today we’re taking a look at what is a dApp and all you need to know about the Decentralized Applications.
Best Play To Earn NFT Games for Android and iOS
The NFT world is rapidly exploding and becoming increasingly more popular. And the growth of the NFT community is also making Play to Earn games the next big thing in crypto.
Because more developers are making such crypto games, the blockchain gaming industry is entering an entirely new market with a lot of potential. As a result of the integration of non-fungible tokens in games, users are able to purchase exclusive in-game assets or merchandise under their name and keep ownership over their digital collections. In the same way, these NFT games enable players to generate passive income by completing quests or staking their tokens. This gives consumers the ability to earn a real income from playing games. There are multiple games that are NFT play to earn titles available today, which can make it difficult to decide which of the P2E games iOS or Android systems support is the one to start with. So, which Play to Earn NFT game is best for mobile users? We’ve listed 20 Android and iOS mobile NFT games that give you the most bang for your buck, considering all the benefits NFT games offer.
Best NFT Podcasts To Listen To Right Now
2021 was a huge year for NFTs. And in 2022 that’s only set to become even bigger. With all the buzz surrounding non-fungible tokens, you're probably interested in knowing more. Or maybe you’re already an enthusiast who just wants to keep up to date with the latest developments in this rapidly evolving industry. But where to start? With so much information out there, it can be challenging to pick the best resources. No worries, we got it. In today’s, we’re listing the 23 best NFT podcasts that you can start listening to now, to get the best insights not just into non-fungible tokens but that will also give you a broader view on the blockchain, cryptocurrencies, DeFi, the metaverse, and more. Let’s get into it.
Top NFT Games In 2022
In contrast to traditional online gaming, blockchain provides players with the opportunity to earn some real money while they are doing what they love. Playing NFT games allows you to earn crypto rewards. The game also offers you the chance to earn digital items with in-game value, such as those associated with characters, clothing, and virtual properties. The value of these digital assets can be converted into real-world money, meaning that gaming is now becoming an even bigger business. As we entered 2021, crypto — and NFTs in particular — reached all-time highs, thanks to a number of new titles. In the blockchain games space, play to earn games (P2E) have acquired massive popularity, so why not dive into their world and learn about them? In the following list, we will go over some of the most popular play to earn games currently available, as well as some of the top upcoming games. This guide can help you find the best play to earn game, whether you're new to blockchain games or have been looking for a new world to explore.
## Axie Infinity
Best NFTs For Passive Income
Crypto has been around for quite a while now, even though it has only really gained widespread attention in the last couple years or so. And as blockchain technology continues evolving investors, are scrambling to find ways of making money off of it. When it comes to investing in crypto, being active - you know, checking the market, comparing charts, following specific projects/ coins, trying not to be fazed by the wild market swings - is the most popular approach. But let’s face it, not all of us are up for trading our hard-earned money for an anxiety-inducing experience, which is what dealing with crypto can feel like most of the time. It’s also possible to opt for a passive income strategy and take the safer route. There are several ways of going about it: - Staking your crypto assets to support a blockchain network and confirm transactions, which will see you earning, in some cases, more than 10% or 20% per year. - Find up-and-coming projects and become an early investor, getting a reward if the project takes off. - Investing in NFTs, which opens up many avenues for both active and passive income. - Trying yield farming, which involves lending your crypto assets for interest to DeFi platforms, where they are locked in liquidity pools. You're paid an interest proportional to your asset's shares of the liquidity pool. Today, we will be focusing specifically on how to earn passive income from NFT coins in 2022 and make your investments work for you (even while you’re asleep).
Best TV Shows On Crypto And Blockchain In 2022
If you came across our recent list of best blockchain movies, then you might be interested in checking out a different type of equally binge-worthy content - blockchain TV shows. Once a niche (read: too geeky) topic for most producers, the small screen is suddenly embracing all things crypto, with even family favorites like The Simpsons and The Big Bang Theory dropping a mention or two. We've put together a list of the best tv shows that you can catch in 2022 to explore more about blockchain and crypto. Read. Set. Play.
Best Blockchain Games
Gaming is growing faster than ever before. The gaming industry is currently valued at $173 billion, with very positive indicators showing that it will surpass the $300 billion mark in the next five years. Behind this boom is a recent surge in new players, especially in mobile platforms, which have made gaming a more practical and easily accessible experience for the estimated 2.6 billion gamers worldwide. But for many, being online just for fun is no longer their primary driver. As the saying goes, time is money and players have certainly taken notice that they're making a big investment in virtual experiences with little return. So they’ve started looking for ways to monetize their hobby. However, beyond the world of eSports, there haven't even been many opportunities for casual players to cash in on the effort they put into gaming - until now. The rise of blockchain games has turned the tables on the gaming industry by making players, and not developers, the main financial decision-makers.Play-to-earn (P2E) crypto gaming is a trend that shouldn't be overlooked. But before we get into the details, it's worth understanding how it all works.
Top Crypto Influencers To Follow In 2022
So, it's fair to say things are running amok in the exploding world of all things crypto. Iconic internet memes selling for millions, teenage TikTokers rallying huge followings into making cryptocurrency investments, gangs of cryptobros terrorizing the financial markets and who could ever forget – 'The Dogefather' aka Elon Musk making a (somewhat) shameless SNL plug.
Best Blockchain Courses In 2022
You've probably heard of blockchain or cryptocurrencies quite a lot lately. It's hard to deny - or even escape - the frenzy around this technology. In fact, you might be interested in dipping your toes into it yourself and becoming a blockchain expert. But there’s a catch (there’s always a catch). Understanding the architecture behind blockchain isn’t an easy feat for most outside the IT space, and trying to wrap your head around advanced cryptography and complex technological jargon can feel quite intimidating at first. So, if you’re one of the undeterred, either out of curiosity or because you’re looking to level up your career, then it might be worth just diving head-on. We've put together a list of the best blockchain courses, from beginner to advanced, to help you learn the tech skills of the future and stay in the know.
Physical NFTs Explained
NFTs are a topic of discussion hard to escape from these days. Either because of multi-million dollar sales or brazen cyber attacks, non-fungible tokens have entered the mainstream world for good. But while the majority of us might think of digital art, music, fashion and the metaverse as the main areas of application of this technology, physical NFTs are also carving out a space of their own in crypto. Here’s a closer look at what they actually stand for and how they are already being used.
Wearable NFTs — Everything There’s To Know About Them
The fashion world has been set abuzz, with die-hard fashionistas desperately rushing to get their hands on the latest Gucci bag or Balenciaga collection. The catch? None of the glitzy apparel and accessories are real. That’s right, they don’t exist in the real world and buyers won’t ever get to actually wear them. Instead, the latest fashion trend is playing out in the metaverse, where users are looking to glam-up their digital avatars with wearable NFTs designed by luxury houses like Louis Vuitton, Valentino and Burberry. Soon enough, flexing in the metaverse won’t be much different from what we already see on Instagram or TikTok. Wearable NFTs are becoming hugely popular thanks to the irresistible personal branding appeal they have in virtual worlds where people can connect with others in more immersive and interactive ways, courtesy of virtual and augmented reality technology.
Best Blockchains For NFT Development
A year ago, at the start of 2021, only a small group of people on the internet really knew what NFTs were. And while non-fungible tokens have been around since the mid-2010’s, it was the now infamous Christie’s auction of Beeple’s ‘Everydays: the First 5000 Days’ that really kicked the NFT craze off. By the end of last year, $41bn had been spent on NFTs and now the world is all over the media, social networks, talk shows and day to day conversations. Crypto investors and enthusiasts have been quick to rush to all things NFT, but you too might now be interested in developing your own NFTs or leveraging your business with non-fungible tokens. Before you do, it’s worth understanding the different blockchain standards available, how to best compare them in connection to your needs and the considerations to bear in mind so you can make the right choice.
How to invest in NFTs In 2022 — A Step-By-Step Guide
There is a reason why NFT was chosen as World of the Year for 2021 and it probably has to do with the fact that none of us could escape from hearing about it last year. And given all the hype, we bet that you already have some understanding of what’s going on with crypto and NFTs. You might even feel tempted to get yourself a few non-fungible in the hopes of striking gold. After all, there are children out there making millions of dollars with their NFT creations so why not cash in, too? The market is definitely soaring like never before as evidenced by the sales volumes of OpenSea, the largest NFT market in the world, smashing all-time records right at the start of 2022. So, with things looking this bright (at least for now), maybe it’s time to jump in on the action and learn how to invest in NFTs. In this guide, we will walk you through the simplest ways of identifying a good NFT investment, how to buy a token and what you should keep in mind if you want to make sure that you’re making a sound choice.
Top Blockchain Trends To Watch in 2022
Blockchain was one of the hottest, if not the biggest, of all tech trends in 2021. And as cryptocurrencies and other blockchain-based assets go mainstream, a greater spotlight has been put on the use cases of the technology across industries and sectors of society. The potential it has to address a vast number of shortcomings of the digital world, including security, transparency, ownership and trust, has forever changed the landscape of technology. Most people will traditionally associate blockchain with the cryptocurrency craze and define it as the technology that underpins Bitcoin, but it’s much broader than that. The rise of NFTs is paving the way for a wider adoption of the technology, popularized by play-to-earn games like Axie Infinity and digital art collections including the Bored Ape Yacht Club and CryptoPunks. So with blockchain on everyone’s lips nowadays, we put together a list of the top blockchain trends that will shape 2022 and how they’re likely to impact the adoption of the technology by businesses and consumers.
Best NFT Marketplaces
Boy oh boy, what a year. Crypto is cool, NFTs are the hottest thing in town and the metaverse is here. There ought to be a bingo somewhere for this kind of alignment. So yes, when pixelated JPEGs of apes/ whales/ and whatnot are among the hottest assets in the world (mind you that oil, gold and real estate still very much exist), it's fair to say that something is probably going down. If you're already part of the crowd that wants to ride this new gold rush, you're probably familiar with the ins and outs of non-fungible tokens. But if not, good news. We've put together this short and sweet guide to ease you into the world of NFTs and the best NFT marketplaces to check out before committing to your first token purchase.
What Is Play to Earn Gaming - And How Is It Changing Gaming
Many gamers will remember the times when glued to the computer, gaming days and nights away, they would be criticized for 'wasting their time'. No doubt that spending hours on end gaming has its drawbacks, but what was once just a hobby has taken a very lucrative turn. Nowadays, gaming has become synonymous with enjoyment as much as it has with earning some big bucks. This is because an increasing number of players are flocking to Play-To-Earn games, where players have real-life financial returns as a reward for the time and effort they put into a game. P2E games have fueled a new world of digital economies, where users can create, sell or exchange in-platform assets in return for money.
Top NFT Artists: 10 Best NFT Creators To Keep An Eye On
Centuries-old paintbrush art selling for eye-watering price tags? Another Picasso or Rembrandt to be hung on the wall of yet another chalet in the Swiss mountains? Auction houses feeding the ultra-rich with eclectic and ancient artifacts? That's so 2020.
Top Blockchain Startups 2021: The Projects You Should Know About
Each year, new blockchain innovations driven by technological advancements spring up in droves. In 2020, however, the pandemic accelerated the tech world in a way not envisioned before and forced most (if not all) businesses to adjust the way they operated.
15 Trends That Will Rule The Blockchain Market In 2021
Last year was one for the history books for all sorts of reasons – but not all of them bad. For the realm of blockchain, 2020 turned out to be a banner year.

L'avenir, livré dans votre boîte de réception

Dernières nouvelles sur le développement de produits
Annonces et offres spéciales